Nigeria’s money supply has decreased to approximately ₦118 trillion in September 2025, according to the Central Bank of Nigeria’s (CBN) recent Money and Credit Statistics Data. This decline is attributed to a 5% decrease in banks’ credit to the economy, which dropped from ₦119.7 trillion in August 2025. The reduction in credit to the economy and money supply reflects the impact of the CBN’s aggressive monetary tightening stance, aimed at curbing inflation, which has remained in double digits despite several interest rate hikes.

The CBN has raised the Monetary Policy Rate (MPR) by over 800 basis points since mid-2023, resulting in tightened liquidity across the banking sector. As a consequence, Narrow Money (M¹) declined by 0.76% month-on-month to ₦39.1 trillion in September, while Quasi Money decreased by 1.99% to ₦78.7 trillion. Furthermore, Demand Deposits fell by 0.86% to ₦34.6 trillion, although Currency Outside Banks (COB) experienced a slight increase of 0.45% to ₦4.47 trillion.

The decline in money supply is primarily driven by a 2.1% month-on-month decrease in credit to the economy, which dropped to ₦96.7 trillion in September. This follows a 4.4% decline in banks’ credit to the private sector, which fell to ₦72.5 trillion. However, credit to the government increased by 5.67% to ₦24.2 trillion, partly offsetting the decline in credit to the private sector.

The CBN’s efforts to combat inflation through monetary tightening have resulted in a decline in money supply, which may have implications for the country’s economic growth. As the central bank continues to monitor inflation and adjust monetary policy accordingly, it remains to be seen how these developments will impact Nigeria’s economy in the coming months. The decline in money supply and credit to the economy may lead to reduced spending and investment, potentially affecting various sectors of the economy.