Cash held outside Nigeria’s banking system rose to N4.92tn in September 2026, while the country’s broad money supply expanded by N7.51tn to N146.60tn, according to the latest monetary and credit statistics released by the Central Bank of Nigeria (CBN).
The CBN data showed that currency outside banks increased by 1.00 per cent, or N48.73bn, from N4.87tn in August to N4.92tn in September, indicating a further rise in the amount of physical cash held by individuals and businesses outside the formal banking system.
The increase coincided with a 5.40 per cent expansion in broad money supply, measured by M3, which climbed from N139.09tn in August to N146.60tn in September.
The figures indicate that cash holdings outside banks continued to rise alongside the expansion of monetary aggregates, although the data do not establish how much of the additional money translated into consumer spending or productive economic activity.
Currency in circulation also increased by 1.50 per cent to N5.52tn in September from N5.44tn in the preceding month.
Narrow money supply, measured by M2, rose by 1.38 per cent to N141tn during the period, reflecting an increase in liquid funds within the economy.
The latest figures highlight the continued growth in Nigeria’s monetary aggregates at a time when the CBN is balancing efforts to contain inflation, manage liquidity and support economic activity.
The expansion in broad money supply was driven partly by an increase in Central Bank bills held by the non-bank public, which rose to N5.60tn in September.
According to the Financial Markets Dealers Association (FMDA), the figure represented the highest level since December 2019, following the reopening of open market operations to local investors in August.
The development suggests that the increase in broad money supply did not necessarily translate into an equivalent increase in cash available for household consumption or business transactions, as the M3 measure also captures certain financial instruments held outside the banking system.
Meanwhile, net domestic assets rose by 11.97 per cent to N115.70tn in September from N103.34tn in August.
In contrast, net foreign assets declined by 13.57 per cent to N30.90tn from N35.75tn during the same period.
Credit to the government also rebounded by 19.26 per cent to N39.40tn in September, ending a three-month decline.
However, credit to the private sector fell by 0.64 per cent to N83.93tn from N84.47tn in August, despite remaining 15.73 per cent higher than its level a year earlier.
The divergence between government and private-sector credit points to differences in credit allocation, with lending to the private sector declining during the month despite the expansion in overall money supply.
The decline in private-sector credit also came after the CBN reduced its Monetary Policy Rate (MPR) by 350 basis points to 23 per cent in September, in a move aimed at easing monetary conditions following progress in reducing inflation.
However, the latest data suggest that the reduction in the benchmark interest rate had yet to translate into month-on-month growth in private-sector credit as of September.
The FMDA noted that open market operation yields of between 16 per cent and 19 per cent continued to provide banks with relatively attractive, lower-risk investment alternatives to lending to businesses.
The association indicated that a stronger response in bank lending was more likely in the fourth quarter as monetary policy rates eased.
The continued increase in cash outside banks also underscores the challenge of encouraging greater use of formal financial services and electronic payment channels, although the figures alone do not establish whether cash transactions increased relative to digital payments.
For policymakers, the movement in cash holdings, money supply and credit to different sectors remains important in assessing liquidity conditions and the effectiveness of monetary policy.
While the expansion in monetary aggregates reflects an increase in the stock of money and related financial instruments, its implications for inflation, lending and economic growth will depend partly on how the additional liquidity is distributed and used across the economy.