Peter Egwuatu
Currency outside banks in Nigeria more than doubled in three years, rising by 119.3 per cent between August 2023 and August 2026, according to the Central Bank of Nigeria, CBN’s Money and Credit Statistics.
The amount of currency outside the banking system increased to N4.874 trillion in August 2026, from N2.223 trillion in August 2023.
Over the same period, banks’ reserves rose by 79.3 per cent, to N30.067 trillion in August 2026 from N16.769 trillion in August 2023.
The data indicate that cash held outside banks expanded at a considerably faster pace than banks’ reserves during the three-year period, although the growth of currency outside banks moderated progressively after the sharp increase recorded in 2024.
Year-on-Year, YoY, the breakdown shows that currency outside banks rose by 74 per cent in August 2024, increasing from N2.223 trillion in August 2023 to N3.868 trillion.
The upward trend continued in August 2025, when currency outside banks increased by another 15 per cent to N4.450 trillion.
By August 2026, the figure had risen further to N4.922 trillion, representing a YoY increase of 10.6 per cent.
Thus, while currency outside banks continued to rise each year, its rate of growth slowed from 74 per cent in 2024 to 15 per cent in 2025 and 10.6 per cent in 2026.
On a compound annual basis, currency outside banks grew by about 30.3 per cent annually between August 2023 and August 2026
Banks’ reserves
Banks’ reserves also recorded substantial growth over the period.
The reserves increased to N22.746 trillion in August 2024from N16.769 trillion in August 2023, representing a 35.6 per cent YoY increase.
The growth accelerated slightly in absolute terms in 2025, with banks’ reserves rising to N30.758 trillion in August 2025, an increase of 35.2 per cent from the previous year.
However, the trend changed in August 2026 as banks’ reserves declined marginally to N30.067 trillion, representing a 2.2 per cent YoY decrease.
Despite the decline in 2026, reserves remained about N13.298 trillion, or 79.3 per cent, above the August 2023 level.
The three-year growth rate of banks’ reserves was approximately 21.5 per cent.
The figures therefore present two different trajectories. Currency outside banks maintained annual growth throughout the period, although at a progressively slower rate, while banks’ reserves recorded two years of strong growth before easing slightly in 2026.
From August 2023 to August 2026, currency outside banks grew by N2.699 trillion, compared with a N13.298 trillion increase in banks’ reserves.
Analysts noted that the development is significant for the banking system because currency held outside banks represents cash that is not directly available to banks for financial intermediation.
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