Currency Outside Banks Decline by N104bn After CBN Lowers February Baseline Interest Rate

By George OPARA

The total physical cash, bank deposits, and highly liquid short-term investments outside Nigeria’s banking system has declined by N104.76 billion between February and April 2026, sequel to the Central Bank of Nigeria’s decision to reduce interest rates at its first Monetary Policy Committee meeting of the year.

Available data update from the CBN’s money and credit statistics showed that currency outside banks fell from N5.19 trillion in February 2026 to N5.08 trillion in April 2026 after the apex bank cut the Monetary Policy Rate (MPR) to 26.5 percent.

The drop represents a 2.02 percent drop within two months of the rate reduction, suggesting slightly tighter liquidity retention within the banking sector despite the easing stance adopted by the apex bank.

Spear News Nigeria gathered that the apex bank did not release currency data for March 2026, making month-on-month analysis unavailable.

Also, Currency in circulation moderated during the period, declining by N63.46 billion from N5.71 trillion in February to N5.65 trillion in April.

This reflects on the reduced cash liquidity across the economy after the MPC decision.

Detailed analysis showed that the share of total currency circulating outside the banking system dipped to 90.03 percent in April 2026 from 90.87 percent in February and 94.33 percent in December 2025.

Compared with December 2025, cash held outside banks dropped by N324.16 billion, representing a 5.99 percent decline.

Apart from the recent moderation, cash circulation remained significantly above 2025 levels.

Currency outside banks rose by N515.58 billion year-on-year from N4.57 trillion in April 2025 to N5.08 trillion in April 2026, while total currency in circulation increased by 12.6 percent to N5.65 trillion.

But reserves held by banks at the CBN rose sharply from N32.74 trillion in February to N34.60 trillion in April 2026, indicating stronger liquidity buffers within the banking system even after the 50-basis-point rate cut announced at the MPC’s 304th meeting in Abuja, the nation’s capital.