Cash held outside Nigeria’s banking system declined by N104.76 billion between February and April 2026 following the Central Bank of Nigeria’s decision to cut interest rates at its first Monetary Policy Committee meeting of the year, fresh data from the apex bank has shown.

Figures obtained from the CBN’s money and credit statistics revealed that currency outside banks dropped from N5.19 trillion in February 2026, the month the Monetary Policy Committee reduced the Monetary Policy Rate (MPR) to 26.5%, to N5.08 trillion in April 2026.

The decline represents a 2.02% reduction within the two-month period after the rate cut.

The CBN, however, did not publish currency data for March 2026, making a month-on-month comparison impossible.

Currency in circulation also declined by N63.46 billion from N5.71 trillion in February to N5.65 trillion in April, indicating a moderation in cash liquidity across the economy after the MPC decision.

Further analysis showed that the proportion of total currency circulating outside bank vaults declined slightly during the review period.

Currency outside banks accounted for 90.03% of total currency in circulation in April 2026, lower than the 90.87% recorded in February 2026 and 94.33% in December 2025.

This indicates that a slightly larger share of cash remained within the banking system after the February rate cut.

Compared with December 2025, currency outside banks declined by N324.16 billion from N5.41 trillion to N5.08 trillion, representing a 5.99% drop.

The movement points to tighter liquidity retention within the banking system despite the reduction in benchmark interest rates.

Despite the recent moderation, currency levels remained significantly higher than the corresponding period last year.

Currency outside banks rose by N515.58 billion from N4.57 trillion in April 2025 to N5.08 trillion in April 2026, representing an 11.29% year-on-year increase.

Similarly, currency in circulation climbed by N631.54 billion year-on-year from N5.01 trillion to N5.65 trillion, translating to a 12.60% increase.

The figures highlight the continued dominance of cash transactions within the Nigerian economy despite the expansion of digital payment channels.

Meanwhile, bank reserves rose sharply during the period under review.

Reserves held by banks at the CBN increased from N32.74 trillion in February 2026 to N34.60 trillion in April 2026, representing a rise of N1.86 trillion or 5.68%.

On a year-on-year basis, reserves expanded by N4.88 trillion from N29.72 trillion in April 2025, reflecting a 16.43% increase.

The increase suggests that banks retained stronger liquidity buffers even after the CBN eased its benchmark interest rate in February.

Nairametrics earlier reported that the Central Bank of Nigeria (CBN) reduced the Monetary Policy Rate (MPR) by 50 basis points to 26.5 per cent from 27 per cent.

The decision was taken at the 304th meeting of the Monetary Policy Committee (MPC) held in Abuja.

However, while there was a decline in currency in circulation, Nigeria’s broad money supply (M3) increased to N124.99 trillion in April 2026, from N123.12 trillion recorded in February 2026, representing an increase of nearly N1.87 trillion within the two-month period.

This increase was largely driven by net domestic assets, which increased significantly to N100.97 trillion from N97.55 trillion within the same period.