Nigeria’s currency in circulation rose by 80.6 per cent to N5.44 trillion in August 2026 from N3.01 trillion recorded in August 2023, highlighting the continued demand for physical cash despite the expansion of electronic payment channels, mobile banking and fintech services.
Data from the Central Bank of Nigeria’s (CBN) Money and Credit Statistics showed that currency in circulation increased by N2.43 trillion over the three-year period, although the pace of growth moderated considerably after a sharp rise in 2024.
The strongest annual increase occurred between August 2023 and August 2024, when currency in circulation climbed from N3.01 trillion to N4.55 trillion, representing an increase of N1.54 trillion, or 51.1 per cent.
Growth subsequently slowed to 11.2 per cent in August 2025, when the amount of physical currency in circulation reached N5.057 trillion, an increase of approximately N508 billion from the corresponding period in 2024.
The deceleration continued in August 2026, with currency in circulation rising by N379 billion, or 7.5 per cent year-on-year, to N5.436 trillion.
The figures indicate a gradual moderation in the rate at which physical cash has expanded, falling from 51.1 per cent in 2024 to 11.2 per cent in 2025 and 7.5 per cent in 2026.
Despite the slower growth, the sustained increase suggests that cash remains an important component of Nigeria’s payment system, even as digital transactions become more widespread.
Banks’ reserves rise 94.7%
The growth in currency in circulation coincided with a substantial increase in banks’ reserves, another component of the monetary system tracked by the CBN.
According to the data, banks’ reserves rose from N18.528 trillion in August 2023 to N25.456 trillion in August 2024, an increase of N6.928 trillion, or 37.4 per cent.
The reserves continued to expand in subsequent years, reaching N31.583 trillion in August 2025 before climbing to N36.067 trillion in August 2026.
Overall, banks’ reserves increased by N17.539 trillion, or approximately 94.7 per cent, between August 2023 and August 2026.
The CBN’s monetary statistics classify currency in circulation and banks’ reserves as components of reserve money, also known as base money, which represents monetary liabilities of the central bank.
The simultaneous increase in physical currency and banks’ reserves points to an expansion in these components of the monetary base over the period, although the figures alone do not establish the extent to which the increase translated into broader money supply growth, lending or inflationary pressure.
Cash demand and banking liquidity
Commenting on the development, David Adonri, Managing Director of High Cap Securities Limited, explained that an increase in the amount of money held outside the banking system could affect the availability of funds for financial intermediation.
“When more money is held as physical cash, a portion of liquidity is outside the immediate deposit base of commercial banks and is therefore less available for banks to intermediate through loans and other financial assets,” Adonri said.
However, the increase in currency in circulation should not automatically be interpreted as evidence of excessive liquidity or rising inflationary pressure.
Demand for physical cash may also reflect higher nominal prices, larger transaction values and an expansion in economic activity, all of which can increase the amount of currency required to facilitate everyday payments.
The development is particularly notable against the backdrop of Nigeria’s expanding digital financial services ecosystem, including mobile banking applications, instant-payment platforms and fintech-led transaction channels.
Although these services have broadened access to electronic payments, the continued rise in currency in circulation indicates that digital adoption has not eliminated the need for physical money.
Cash remains relevant for transactions across different segments of the economy, while the extent of reliance on physical currency may vary according to consumer preferences, access to banking services and the nature of commercial activities.
The latest figures therefore highlight the coexistence of expanding electronic payment infrastructure and sustained demand for cash in Nigeria’s financial system.