By February 2026, Nigeria’s cash story began to quieten after the festive spending rush.
Central Bank of Nigeria data showed currency outside banks edged down to ₦5.20 trillion.
Post-Festive Cash Cooling
As a result, the 0.058% dip signalled easing demand for physical cash after year-end surge.
In December 2025, cash outside banks peaked at ₦5.41 trillion during heavy festive spending.
Then January pushed levels down to ₦5.21 trillion as post-holiday adjustments gathered pace.
By February, the trend continued, although the decline remained modest and largely expected overall.
Liquidity Conditions Stabilise
Meanwhile, total currency in circulation stayed almost unchanged at ₦5.73 trillion during period.
At the same time, money supply slipped slightly to ₦123.14 trillion, showing stable liquidity conditions.
Importantly, the system shifted not in volume, but in where people held cash.
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Gradually, households and businesses moved funds back into banks and reduced excess cash holdings.
Consequently, this return strengthened banking activity and improved overall financial system efficiency nationwide.
It also boosted monetary policy transmission as more liquidity flowed through formal financial channels.
Seasonal Cycle Persists
Notably, this pattern reflects a familiar seasonal cycle in Nigeria’s cash-driven economic structure.
Typically, cash rises in the final quarter, then eases as the new year begins.
Earlier in 2025, levels stayed stable and fluctuated within a relatively narrow range.
From October, cash rose from ₦4.65 trillion and reached ₦4.91 trillion in November.
Afterwards, December recorded a sharp increase, driven by retail spending and increased withdrawals nationwide.
Even so, cash still dominates transactions, especially across Nigeria’s large informal economic sector.
Overall, February’s data shows a gradual return to more balanced liquidity conditions nationwide.
Thus, the trend suggests Nigeria’s liquidity cycle is stabilising after seasonal spikes in demand.
