Nigeria’s broad money supply, known as M3, fell 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 came despite the CBN Monetary Policy Committee’s decision at its 302nd meeting to cut the Monetary Policy Rate (MPR) in an effort to balance economic growth and inflation.
M3, which includes M2 and other broad components, is affected by net domestic assets and net foreign assets. On a year‑on‑year basis, M3 was still 7.6 percent higher than the N109.41 trillion recorded in September 2024, suggesting a moderate balance between longer‑term liquidity expansion and short‑term tightening pressures. Foreign assets also rose slightly, increasing 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 M3 decline. In addition, the introduction of a 75 percent CRR on non‑TSA public‑sector deposits likely affected the money supply.
These changes have implications for Nigeria’s economic growth and inflation rate. The reduction in MPR is intended to stimulate lending and boost growth, while the higher CRR aims to limit the amount of money available for lending and curb inflation. CBN Governor Olayemi Cardoso emphasized that the policy moves were designed to balance the need for growth with inflation control.
The CBN will continue to monitor the economy and adjust its policies as necessary to maintain stability and promote growth. As the Nigerian economy evolves, the central bank’s monetary policy decisions will remain crucial in shaping the country’s economic trajectory.
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