The total value of currency in circulation in Nigeria fell to N5.52 trillion in June 2026, a decrease of N150 billion from the N5.67 trillion recorded in May 2026, according to data released by the Central Bank of Nigeria (CBN).
Monthly Decline in Currency Circulation
The CBN's latest money and credit statistics show that currency in circulation declined by 2.6% month-on-month in June. This marks the first monthly drop since March 2026, when the figure stood at N5.41 trillion. The reduction in June reverses the upward trend observed in April and May, when currency in circulation increased by 2.3% and 1.8%, respectively.
Currency outside banks also decreased, falling to N5.08 trillion in June from N5.22 trillion in May. This represents a 2.7% decline, suggesting that more cash is being held within the banking system rather than in the hands of the public.
Year-on-Year Growth Remains Strong
Despite the monthly decline, the year-on-year comparison shows a significant increase. Currency in circulation in June 2026 was 18.5% higher than the N4.66 trillion recorded in June 2025. This growth reflects the continued expansion of the money supply in the Nigerian economy.
The CBN attributed the overall increase in currency circulation over the past year to the bank's monetary policy measures aimed at stimulating economic activity. However, the central bank has also been implementing policies to encourage digital payments and reduce the reliance on physical cash.
Implications for Monetary Policy
Economists view the decline in currency circulation as a positive sign for the CBN's cashless policy initiatives. A lower volume of cash in circulation suggests that more transactions are being conducted through electronic channels, reducing the cost of currency management and enhancing financial inclusion.
According to financial analyst Dr. Adebayo Ogunlesi, "The reduction in currency circulation is a welcome development. It indicates that the CBN's efforts to promote a cashless economy are gaining traction. However, the central bank must continue to monitor the situation to ensure that the decline does not hinder economic growth."
The CBN has set a target to reduce the currency-to-GDP ratio to below 5% by 2030, from the current level of about 7.2%. The latest data suggests that the bank is making progress toward this goal.
Regional Distribution and Challenges
The CBN data also reveals regional disparities in currency circulation. The North-Central and South-South regions account for the highest shares of currency in circulation, while the North-East and South-East have the lowest. These differences reflect variations in economic activity and banking penetration across the country.
Challenges remain, including the prevalence of cash-based transactions in rural areas and the informal sector. The CBN has been working with commercial banks to expand the network of point-of-sale (POS) terminals and mobile money agents to address these issues.
In addition, the central bank has launched a public awareness campaign to educate citizens on the benefits of digital payments. The campaign emphasizes the convenience, security, and efficiency of electronic transactions compared to cash.
Outlook for the Remainder of 2026
Looking ahead, the CBN expects currency in circulation to continue its gradual decline as more Nigerians adopt digital payment methods. The bank is also exploring the introduction of a central bank digital currency (CBDC) to further reduce the reliance on physical cash.
However, external factors such as inflation and economic uncertainty could affect the pace of this transition. The CBN remains committed to its monetary policy objectives, which include maintaining price stability and supporting sustainable economic growth.
