N264bn Cash Withdrawn as Nigerians Stockpile Cash for ‘Detty December’ — CBN

Nigerians withdrew a net ₦264.48 billion from the banking system in November 2025, pushing the total value of cash held outside commercial banks to ₦4.91 trillion, according to the latest Money and Credit Statistics released by the Central Bank of Nigeria (CBN).

The sharp month-on-month increase, widely linked to increased spending during the festive “Detty December” season, represents a rise from ₦4.65 trillion recorded in October 2025, underscoring the country’s persistent preference for physical cash transactions despite sustained efforts to deepen electronic payment systems.

CBN data further showed that total currency in circulation also increased in November, climbing to ₦5.26 trillion from ₦5.06 trillion in October. As a result, the proportion of cash circulating outside the banking system rose to approximately 93.34 per cent, compared to 91.87 per cent in the preceding month.

Although both indicators expanded, the faster growth of cash held outside banks further reduced the share of currency retained within bank vaults.

On a year-on-year basis, currency outside banks increased by ₦258.75 billion, rising from ₦4.65 trillion in November 2024 to ₦4.91 trillion in November 2025—representing a growth rate of about 5.56 per cent.

Similarly, total currency in circulation rose by ₦383.67 billion over the same period, from ₦4.88 trillion to ₦5.26 trillion, reflecting a 7.87 per cent increase.

However, while the absolute volume of cash outside banks expanded, the CBN data revealed a marginal improvement in the proportion temporarily retained within the banking system. In November 2024, the share of cash outside banks stood higher at 95.38 per cent, indicating a slight moderation over the twelve-month period.

Cash Outside Banks Peaked in November

A breakdown of the 2025 trend showed fluctuations in cash holdings throughout the year before peaking in November.

The year opened with ₦4.74 trillion held outside banks in January, out of a total currency circulation of ₦5.24 trillion, placing the ratio at 90.48 per cent.

In February, currency outside banks declined to ₦4.52 trillion, while total circulation fell to ₦5.04 trillion, producing the lowest ratio of the year at 89.65 per cent.

The figure rose again in March to ₦4.60 trillion, with total circulation at ₦5.00 trillion, before moderating slightly in April. By May, Nigerians held ₦4.63 trillion outside banks, one of the highest ratios of the year at 92.40 per cent.

Mid-year data showed a brief consolidation, with cash outside banks falling to ₦4.49 trillion in June and ₦4.42 trillion in July, the lowest absolute level recorded in 2025.

From August, the trend reversed as cash outside banks climbed steadily, reaching ₦4.65 trillion in October before surging to ₦4.91 trillion in November—the highest level recorded during the eleven-month review period.

Policy Implications and MPC Decisions

The sustained dominance of cash outside the regulated financial system presents major macroeconomic challenges. High out-of-bank cash weakens monetary control, reduces deposit mobilisation, constrains bank liquidity, and encourages informal transactions that evade regulatory oversight.

It also complicates inflation management, as large volumes of cash held outside the banking system blunt the effectiveness of monetary policy.

The surge in November came amid the CBN’s efforts to tighten liquidity and rein in inflation. In September 2025, the Monetary Policy Committee (MPC) cut the Monetary Policy Rate by 50 basis points to 27 per cent, its first rate reduction since 2020, citing easing inflationary pressures and improved foreign exchange conditions.

However, at its November meeting, the MPC retained the benchmark rate at 27 per cent and adjusted the policy corridor to discourage banks from warehousing liquidity at the apex bank.

Announcing the decision after the committee’s 303rd meeting, CBN Governor Olayemi Cardoso said the MPC voted by a majority to maintain the current policy stance, stressing that the economy required more time for earlier policy measures to fully transmit.