By Peter Egwuatu
Currency in circulation in Nigeria rose by 81 per cent to N5.44 trillion in August 2026, from N3.01 trillion in August 2023, underscoring the continued strong demand for physical cash despite the rapid expansion of electronic payments over the past three years.
Data from the Central Bank of Nigeria’s, CBN, Money and Credit Statistics show that the strongest increase occurred between August 2023 and August 2024 when currency in circulation rose from N3.010 trillion in August 2023 to N4.55 trillion in August 2024, representing an increase of N1.54 trillion or 51.1 per cent.
The growth moderated considerably in the following years. In August 2025, currency in circulation increased to N5.057 trillion, up N508 billion or 11.2 per cent from the previous year.
By August 2026, the growth rate moderated further though it hit new threshold of N5.436 trillion, an increase of N379 billion or 7.5 per cent Year-on-Year, YoY.
The figures therefore indicate that while the amount of physical cash in circulation has continued to rise, the pace of growth has slowed significantly, from 51.1 per cent in 2024 to 11.2 per cent in 2025 and 7.5 per cent in 2026.
Banks’ reserves
The increase in currency in circulation occurred alongside a substantial rise in banks’ reserves. According to the data supplied, 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.
They increased further to N31.583 trillion in August 2025, before reaching N36.067 trillion in August 2026. Overall, banks’ reserves increased by N17.539 trillion, or 94.7 per cent, between August 2023 and August 2026. The CBN’s monetary statistics identify currency in circulation and banks’ reserves as components of reserve money or base money.
Commenting on the development, David Adonri, Managing Director, High Cap Securities Limited, said: “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.
However, the rising currency stock should not automatically be interpreted as evidence of excessive liquidity or inflationary pressure. Demand for cash can also increase because of higher nominal prices, larger transaction values and the expansion of economic activity.
The increase is particularly noteworthy because Nigeria has experienced rapid growth in electronic payments, mobile banking, fintech services and instant-payment platforms.
The continued expansion of physical currency therefore suggests that Nigeria’s digital-payment revolution has not eliminated the country’s cash economy.”
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