Nigeria’s money supply fell to roughly ₦118 trillion in September 2025, according to the Central Bank of Nigeria’s (CBN) latest Money and Credit Statistics. The decline follows a 5 % drop in banks’ credit to the economy, which fell from ₦119.7 trillion in August 2025. This contraction reflects the impact of the CBN’s aggressive monetary‑tightening stance, aimed at curbing inflation that has remained in double‑digit territory despite several interest‑rate hikes. Since mid‑2023, the CBN has raised the Monetary Policy Rate by more than 800 basis points, tightening liquidity across the banking sector.
As a result, narrow money (M¹) fell 0.76 % month‑on‑month to ₦39.1 trillion in September, while quasi‑money declined 1.99 % to ₦78.7 trillion. Demand deposits dropped 0.86 % to ₦34.6 trillion, although currency outside banks (COB) rose slightly, up 0.45 % to ₦4.47 trillion. The overall reduction in money supply is driven primarily by a 2.1 % month‑on‑month fall in credit to the economy, which decreased to ₦96.7 trillion in September. This follows a 4.4 % decline in banks’ credit to the private sector, down to ₦72.5 trillion, while credit to the government rose 5.67 % to ₦24.2 trillion, partially offsetting the private‑sector slowdown.
The CBN’s tightening measures have thus led to a shrinking money supply, which could have implications for Nigeria’s economic growth. Reduced credit and liquidity may dampen spending and investment, affecting various sectors of the economy. As the central bank continues to monitor inflation and adjust policy, the impact of these developments on Nigeria’s economy in the coming months remains uncertain.
Comments are closed for this story.