Nigeria’s broad money supply, also known as M3, decreased by 1.6 percent to N117.78 trillion in September 2025, down from N119.69 trillion in August, according to recent data from the Central Bank of Nigeria (CBN). This decline occurred despite the CBN Monetary Policy Committee’s decision to cut the Monetary Policy Rate (MPR) at its 302nd meeting, aiming to balance economic growth and inflation.

The M3 money supply, which encompasses M2 and other broad components, is influenced by net domestic assets and net foreign assets. On a year-on-year basis, M3 was still up by 7.6 percent compared to N109.41 trillion in September 2024, indicating a moderate balance between longer-term liquidity expansion and short-term tightening pressures.

Foreign assets also experienced a slight increase, rising by 0.2 percent to N41.66 trillion from N41.59 trillion in August. The CBN’s decision to reduce the MPR by 50 basis points to 27.00 percent, adjust the Standing Facilities corridor, and raise the Cash Reserve Requirement (CRR) for commercial banks to 45 percent, may have contributed to the decline in M3. Additionally, the introduction of a 75 percent CRR on non-TSA public sector deposits may have affected the money supply.

The decline in M3 may have implications for the country’s economic growth and inflation rate. The CBN’s monetary policy decisions are aimed at maintaining economic stability and controlling inflation. The reduction in MPR is expected to increase lending and stimulate economic growth, while the increase in CRR is intended to reduce the amount of money available for lending and curb inflation.

The Central Bank of Nigeria’s governor, Olayemi Cardoso, stated that the monetary policy decisions were made to balance the need for economic growth and inflation control. The CBN will continue to monitor the economy and make adjustments as necessary to maintain stability and promote growth. As the Nigerian economy continues to evolve, the CBN’s monetary policy decisions will play a crucial role in shaping the country’s economic trajectory.