Cash Outside Nigerian Banks Hits N4.92tn as Money Supply Surges

By Chibuzor Alli

Cash held outside Nigeria’s banking system climbed to N4.92tn in September 2026, reflecting a further increase in physical currency circulating beyond banks as the country’s overall money supply continued to expand.

The latest figure represents an increase of N48.73bn from N4.87tn recorded in August, according to monetary data published on the Central Bank of Nigeria (CBN) website on Wednesday.

The development coincided with a sharp rise in Nigeria’s broad money supply, which increased by N7.51tn to N146.6tn in September from N139.09tn in the preceding month.

News men reports that the expansion in money supply reflects a broader increase in the volume of money circulating within the economy.

Narrow money, which consists of currency and highly liquid deposits, also rose during the period, increasing to N44.05tn in September from N43.11tn in August, the CBN data showed.

Money supply expands by 18.3%

The rise in cash outside banks came against the backdrop of an 18.3 per cent increase in Nigeria’s broad money supply between January and September.

Broad money supply grew from N123.95tn at the beginning of the year to N146.6tn in September, highlighting the significant expansion in the stock of money within the financial system.

Unlike narrow money, broad money captures a wider range of financial assets, including physical cash, demand deposits, savings and time deposits, as well as foreign currency deposits.

Currency outside banks, meanwhile, refers specifically to physical cash held by individuals and businesses outside the banking system.

CBN rate cut coincides with liquidity growth

The expansion followed the CBN’s decision in September to reduce its benchmark interest rate by 350 basis points, bringing it down to 23 per cent from 26.5 per cent.

The PUNCH reports that the reduction was the largest cut in the benchmark rate since December 2006.

The rate decision marked a significant adjustment in the central bank’s monetary policy stance, coming amid changes in the country’s monetary aggregates.

However, the increase in cash outside banks does not, on its own, establish why individuals and businesses held more physical currency or demonstrate a direct causal link between the interest rate cut and the rise in money supply.

Reserve requirements remain unchanged

Despite cutting its benchmark interest rate, the Monetary Policy Committee retained key reserve requirements for financial institutions.

The Cash Reserve Requirement for commercial banks remained at 45 per cent, while merchant banks continued to operate under a 16 per cent requirement.

The committee also maintained the 75 per cent reserve requirement on non-Treasury Single Account public-sector deposits.

The measures indicate that the CBN kept these existing liquidity-control requirements in place even as it lowered the benchmark interest rate.

With cash outside banks rising to N4.92tn and broad money supply reaching N146.6tn in September, the latest figures provide a snapshot of Nigeria’s changing monetary conditions.