In January 2026, cash held outside Nigeria's banking system fell by N197.68 billion, bringing the total to N5.21 trillion. This decline reflects a larger trend where the amount of money circulating in the economy has remained relatively stable, showing a slight dip of N1.74 billion in total currency in circulation. The Central Bank of Nigeria's recent Money and Credit Statistics report highlights this decline in cash as well as a notable drop in bank reserves, indicating potential liquidity issues within the banking sector.

Despite this decrease in cash outside the banks, the data underscores a concerning reality: a significant majority of Nigeria's physical currency continues to stay outside formal banking institutions. As of January 2026, approximately 90.91 percent of cash in circulation is held outside deposit money banks. This situation raises questions about the efficiency of the banking system, monetary policy, and how effectively the central bank can manage liquidity in the economy while coping with such a large proportion of cash remaining unbanked.

The implications of these financial trends could be profound, as they affect economic stability and the efficacy of monetary policy. As the Central Bank of Nigeria grapples with these challenges, a sustained focus on improving banking penetration and encouraging cash deposits becomes crucial. The decrease in bank reserves and the predominance of unbanked cash could hinder the central bank's ability to influence money supply and stabilize the economy, prompting calls for reforms in the financial sector to foster greater trust and usage of formal banking channels.