Cash outside banks rises to N5.19trn as private sector credit rebounds
By Aboki Forex —
Currency outside Nigeria's banking system rose to N5.193 trillion in May 2026. This is a 2.16% increase from N5.083 trillion recorded in April 2026, according to data from the Central Bank of Nigeria (CBN).
The figure is slightly higher than the N5.188 trillion recorded in February. It shows that cash holdings remain elevated despite the CBN's tight monetary stance over the last few years.
The CBN has been mopping up excess liquidity, tightening credit conditions, and influencing money supply to manage inflation and stabilise the financial system. But recent data suggests persistent reliance on cash in the economy.
At the same time, private sector credit is beginning to recover. Banking sector credit to the private sector increased by 0.56% to N81.041 trillion in May from N80.585 trillion in April. This points to a mild rebound in lending to businesses and households after a contraction the previous month.
However, credit levels remain far below recent highs. Private sector credit is still 14.34% lower than the February peak of N94.610 trillion. It is also below the N93.743 trillion recorded in January. Although it is 6.87% higher than December 2025 levels, the data reflects cautious lending conditions in the banking sector.
The CBN data also highlights volatility in liquidity flows within the financial system. Currency in circulation and cash outside banks have both stayed elevated. This suggests a continued preference for physical cash transactions.
Analysts say the trend reflects structural challenges in financial inclusion, inflation pressures, and consumer reliance on cash-based payments in Africa's largest economy.
Meanwhile, the federal government is considering strengthening the cashless policy. This is part of broader efforts to curb the rising wave of kidnappings and related criminal activities across the country, according to Leadership reports.