Cash outside banks drops as money supply contracts
Nigeria’s cash held outside the banking system has declined, alongside a drop in overall money supply. Data from the Central Bank of Nigeria shows that more than 90% of currency in circulation remains outside banks, despite recent reductions. Olayemi Cardoso, the CBN Governor, announced a cut in the benchmark interest rate, citing easing inflation. The changes come amid ongoing efforts to stabilise the economy and strengthen the naira.
TLDR
- Cash outside banks fell by N197.68bn in January 2026 to N5.21tn, down from N5.41tn in December 2025.
- Over 90% of Nigeria’s currency in circulation was still outside banks in January 2026, though this ratio eased from 94.33% in December 2025.
- Broad money supply (M3) dropped by N1.05tn to N123.36tn in January 2026, mainly due to a fall in net foreign assets.
- The naira strengthened in the official market, ending January 2026 at N1,391 to the dollar, compared to N1,431 at the start of the month.
- Olayemi Cardoso announced a reduction of the monetary policy rate to 26.5% after the MPC’s 304th meeting, as headline inflation eased to 15.10% in January 2026 from 15.15% in December 2025.
