Cash Outside Banks Rises to N5.19trn As Credit Rebounds
- The CBN has maintained a tight monetary stance over the last few years in a bid to manage inflation and stabilise the financial system
- Part of the measures include mopping up excess liquidity, tightening credit conditions, and influencing the money supply
- Despite these efforts, recent data show that cash usage outside the formal banking system
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
Currency outside Nigeria’s banking system rose to N5.193 trillion in May 2026, indicating persistent reliance on cash in the economy
From N5.083 trillion recorded in April 2026, it increased by 2.16% in May 2026, according to data from the Central Bank of Nigeria (CBN).
Source: Getty Images
Cash outside bank
The figure is also slightly higher than the N5.188 trillion recorded in February, showing that cash holdings remain elevated.
The rise in cash outside banks comes at a time when private sector credit is also beginning to recover after a brief slowdown.
Banking sector credit to the private sector increased by 0.56% to N81.041 trillion in May from N80.585 trillion in April.
This suggests a mild rebound in lending activity to businesses and households after the contraction recorded in the previous month.
However, credit levels remain well below recent highs despite the recovery
Private sector credit is still 14.34% lower than the February peak of N94.610 trillion and below the N93.743 trillion recorded in January.
Source: Getty Images
Although it remains 6.87% higher than December 2025 levels, the data reflects cautious lending conditions in the banking sector.
The CBN data also highlights the volatility in liquidity flows within the financial system over the past few months.
Currency in circulation and cash outside banks have both remained elevated, suggesting 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.
Federal govt mulls tightening cashless policy to curb kidnappings
Meanwhile, the federal government is considering the reinvigoration of the cashless policy as part of broader efforts to curb the rising wave of kidnappings and related criminal activities across the country.
Leadership reports that the consideration of strengthening the policy comes amid intensified efforts by security agencies to dismantle kidnapping syndicates and cut off their sources of funding, as authorities continue to seek sustainable solutions to the country’s security challenges.
CBN’s foreign reserves record first gain in 5 months
Earlier, Legit.ng reported that Nigeria’s foreign exchange (forex) reserves recorded their first increase in five months, significantly boosting the Central Bank of Nigeria’s efforts to support the naira’s recovery.
In a statement published on its website, the CBN reiterated its commitment to intervening in the foreign exchange market to increase liquidity and ease demand pressure on the naira.
The increase was attributed to steady improvements in crude oil production and upbeat global oil prices.
Source: Legit.ng
