Cash Outside Banks Falls to ₦4.8tn, Lowest in Eight Months
Cash outside banks falls to eight-month low
The amount of cash held outside Nigerian banks fell to ₦4.8 trillion in July 2026, its lowest level in eight months, according to the latest Money and Credit Statistics from the Central Bank of Nigeria (CBN).
The figure represents a decline of ₦118.7 billion, or 2.4 per cent, from ₦4.92 trillion recorded in June. It also marks the second consecutive monthly decline in cash held outside the banking system.
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Cash Holdings Continue Downward Trend
The latest decline extends a trend that began in May, when currency outside banks stood at ₦5.19 trillion.
By July, the amount had fallen by about ₦390 billion over two months. The July figure was also ₦450.2 billion, or 8.6 per cent, below the level recorded in January.
The movement represents a reversal from the significant increase in cash holdings recorded towards the end of 2025. Currency outside banks rose from ₦4.45 trillion in August 2025 to ₦4.91 trillion in November before reaching ₦5.41 trillion in December.
Bank Reserves Rise Sharply
The decline in cash outside banks occurred alongside a significant increase in commercial bank reserves with the CBN.
Bank reserves rose from ₦34 trillion in June to ₦36.73 trillion in July, representing an increase of ₦2.73 trillion, or eight per cent. The increase points to stronger deposits and greater liquidity within the formal banking system.
Currency in circulation also declined during the period, falling from ₦5.52 trillion in June to ₦5.38 trillion in July.
This means the reduction in cash outside banks was not simply a transfer of physical currency from households and businesses back into bank vaults. The overall amount of physical currency in circulation also contracted.
Digital Payments Could Be Supporting the Shift
The decline in cash holdings could reflect several factors, including increased use of electronic payment channels and greater movement of funds through bank accounts.
However, the CBN data does not establish how much of the decline resulted specifically from digital payments.
The development nevertheless comes as the CBN continues to promote greater financial inclusion and reduce dependence on physical cash within the economy.
The apex bank has set a target of reducing cash outside the banking system to below 40 per cent of total currency in circulation while seeking to increase financial inclusion among adults to 95 per cent by 2028.
Implications for Housing and Property Transactions
A stronger formal banking system could have implications for Nigeria's housing and property market, particularly where transactions depend on mortgage finance, bank transfers and formal financial records.
Greater use of banking channels can improve the traceability of property payments and potentially make it easier for financial institutions to assess customers for housing-related credit.
For developers and property investors, wider adoption of formal payment channels can also support more transparent transaction processes. However, the decline in physical cash alone does not mean that housing finance has become more accessible.
Mortgage affordability will continue to depend on interest rates, household incomes, property prices, lending standards and the availability of long-term housing finance.
Outlook
The decline in cash outside banks to ₦4.8 trillion signals a gradual shift in the structure of Nigeria's money circulation, although further data will be needed to determine whether the trend continues.
For the wider economy, sustained movement towards formal banking and digital transactions could strengthen financial inclusion and improve the flow of funds through regulated financial institutions. For the housing market, the potential benefits will depend on whether stronger financial intermediation eventually translates into greater access to affordable mortgages and property finance
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