CBN Puts Excess Cash, FX Demand Under Watch Ahead of Nigeria’s 2027 Polls

• The CBN says it is preparing for a potential rise in money circulation during Nigeria’s 2027 election cycle.

• Governor Olayemi Cardoso said the bank would monitor liquidity, currency circulation, monetary aggregates and foreign exchange demand.

• The CBN plans to deploy monetary policy tools to mop up excess liquidity if necessary.

• Cardoso also warned that cash transaction limits and rules against currency abuse would remain in force during the election period.

September 22, () – Nigeria’s central bank says it is prepared to mop up excess liquidity and intensify scrutiny of cash transactions if election-related spending threatens monetary stability ahead of the country’s 2027 general elections.

Central Bank of Nigeria (CBN) Governor Olayemi Cardoso said the bank had developed different scenarios for managing the expected increase in money circulation during the election period and would base its response on economic data rather than assumptions.

Cardoso spoke in response to questions from journalists following the 307th meeting of the Monetary Policy Committee (MPC) in Abuja on Tuesday, September 22.

Nigeria’s election cycles typically attract attention to changes in cash circulation and liquidity, but Cardoso said the CBN would monitor several indicators before determining whether intervention was necessary.

“We will carefully monitor currency circulation, banking system liquidity, monetary aggregates, foreign exchange demand, and act accordingly,” Cardoso said.

He said the central bank had analysed different scenarios and models to understand how financial conditions could change during an election period.

The CBN governor said the bank would deploy its monetary policy tools if increased spending resulted in excessive liquidity in the financial system.

“We will proactively deploy any tools and instruments to mop up any excess liquidity as it has to be,” Cardoso said, adding that the central bank would not allow itself to be “caught unawares”.

The comments signal that the CBN is preparing to manage potential election-related liquidity pressures at a time when maintaining monetary and foreign exchange stability remains central to its policy agenda.

Cardoso also sought to reassure Nigerians that sufficient currency would be available during the election period, while warning that existing restrictions governing cash transactions would remain in force.

“Currency abuse, too, will not be permitted, and we will intensify our vigilance in that respect and work collaboratively with the law enforcement agencies,” he said.

The central bank will also encourage greater use of electronic payments, which Cardoso said provide greater transparency and a transaction trail.

He warned that the CBN would enforce existing limits governing cash transactions during the election cycle.

“If people expect that we will look the other way on those limits, we will not,” Cardoso said.

Cardoso also pointed to the CBN’s memorandum of understanding with the Ministry of Finance, saying greater coordination between monetary and fiscal authorities would be important in managing financial conditions during the election period.

He expressed confidence that the central bank could manage the anticipated increase in money circulation without undermining progress made on monetary stability.

“I’m confident that we will be able to manage the volume of money expected to be in circulation during that period so it does not destabilise any of the hard work that has been done,” Cardoso said.

Nigeria is expected to hold its next general elections in 2027, when voters will elect a president, members of the National Assembly and other representatives.