Currency in circulation rises 81% to N5.4trn
By Peter Egwuatu
Currency in circulation in Nigeria increased by 81 percent, reaching N5.44 trillion in August 2026, up from N3.01 trillion in August 2023. This rise highlights a sustained demand for physical cash, despite significant growth in electronic payment systems over the last three years.
Data from the Central Bank of Nigeria (CBN) shows that the most substantial surge occurred between August 2023 and August 2024. During this period, currency in circulation jumped from N3.01 trillion to N4.55 trillion, marking an increase of N1.54 trillion or 51.1 percent.
However, growth rates have moderated in subsequent years. By August 2025, the amount of currency in circulation had risen to N5.057 trillion, representing an increase of N508 billion, or 11.2 percent, from the previous year. In August 2026, the growth rate declined further, with currency in circulation reaching N5.436 trillion, an increase of N379 billion or 7.5 percent year-on-year.
These figures indicate that while the volume of physical cash in circulation continues to rise, the rate of growth has significantly slowed, dropping from 51.1 percent in 2024 to 11.2 percent in 2025, and 7.5 percent in 2026.
Banks’ Reserves
The rise in currency in circulation coincided with a significant increase in banks’ reserves. According to CBN data, banks’ reserves climbed from N18.528 trillion in August 2023 to N25.456 trillion in August 2024, reflecting an increase of N6.928 trillion or 37.4 percent.
Reserves continued to grow, reaching N31.583 trillion in August 2025 and N36.067 trillion in August 2026. Overall, banks’ reserves surged by N17.539 trillion, or 94.7 percent, from August 2023 to August 2026. The CBN categorizes currency in circulation and banks’ reserves as components of reserve money or base money.
David Adonri, Managing Director of High Cap Securities Limited, commented on the development, stating that when more money is held as physical cash, it reduces liquidity within the deposit base of commercial banks, making funds less available for loans and other financial assets. He cautioned that a rising currency stock should not be automatically viewed as a sign of excessive liquidity or inflationary pressure. Increased demand for cash can also stem from higher nominal prices, larger transaction values, and overall economic growth.
This increase is particularly significant given Nigeria’s rapid advancement in electronic payments, mobile banking, fintech services, and instant-payment platforms. The persistence of physical currency usage indicates that the transition to a digital payment landscape has not wholly supplanted the country’s cash economy.
