Cash Hoarding Surges: Nigerians Withdraw N264.48bn as Money Outside Banks Hits Record N4.91trn

Follow

( 0 Followers )

X

Follow

E-mail : *

Follow Unfollow

Nigerians dramatically increased cash withdrawals in November 2025, pulling a net N264.48 billion from the banking system and driving the volume of currency held outside banks to an all-time high of N4.91 trillion, according to the latest Money and Credit Statistics released by the Central Bank of Nigeria (CBN).

The sharp rise represents a significant jump from N4.65 trillion recorded in October 2025, underscoring growing public reliance on physical cash amid economic pressures and lingering confidence issues within the financial system.

CBN data further revealed that total currency in circulation climbed to N5.26 trillion in November, up from N5.06 trillion in the previous month. This means an unprecedented 93.34 per cent of all naira in circulation was held outside the banking sector — up from 91.87 per cent in October and the highest ratio recorded throughout 2025.

The development poses a major challenge to Nigeria’s cashless policy objectives. Despite sustained regulatory efforts to deepen digital payments and financial inclusion, analysts attribute the surge in cash hoarding to residual distrust following past cash shortages, the dominance of the informal economy, poor internet and network reliability in many areas, and rising electronic transaction costs.

Year-on-year figures also show that currency in circulation grew by approximately 7.87 per cent, rising from N4.88 trillion in November 2024. Although the proportion of cash outside banks declined slightly from 95.38 per cent a year earlier, public holdings continue to overwhelmingly outweigh funds retained within the banking system.

Economists warn that persistently high volumes of currency outside banks weaken the effectiveness of the CBN’s monetary policy tools, increase liquidity risks, and complicate inflation management in Africa’s largest economy.

While the apex bank has yet to issue an official statement on the November data, the figures highlight the uphill task facing policymakers in steering Nigerians toward electronic payment channels.

The November spike capped a volatile 2025, during which cash outside banks fell to about N4.42 trillion mid-year before surging sharply in the final quarter.