Table of Contents
CBN Reports Nigeria’s Money Supply Surges to N119 Trillion in October 2025
The Central Bank of Nigeria (CBN) has disclosed that the country’s broad money supply (M3) climbed to N119.04 trillion in October 2025, up from N117.78 trillion recorded in September. This increase of N1.25 trillion, or 1.06%, marks a reversal from the previous month’s slower growth.
Year-on-Year Growth Reflects Rising Liquidity Amid Monetary Tightening
On an annual basis, M3 expanded by N11.04 trillion, equivalent to 10.22%, compared to N107.99 trillion in October 2024. This sustained liquidity build-up in the financial system persists despite the Central Bank’s cautious monetary stance aimed at curbing inflationary pressures.
Monetary Policy Rate Cut Spurs Money Supply Expansion
The uptick in October followed the Monetary Policy Committee’s (MPC) decision in September 2025 to reduce the Monetary Policy Rate (MPR) by 50 basis points to 27%, marking the first rate cut since 2020. This move was prompted by easing inflation and improved foreign exchange market conditions.
Components of Broad Money Supply and Their Trends
Broad money supply, encompassing narrow money (M1), quasi-money, and other liquid assets, saw a notable increase, signaling greater availability of cash and near-cash instruments. This occurred even as the CBN carefully balanced liquidity expansion without reigniting inflation.
Domestic Factors Drive Money Supply Growth
A key contributor to the rise was a sharp increase in net domestic assets (NDA), which surged by N8.11 trillion (10.65%) from N76.12 trillion in September to N84.23 trillion in October. This growth reflects heightened domestic credit activity, including increased government borrowing and expanded lending by banks to the private sector.
Foreign Assets Contract Amid External Pressures
Conversely, net foreign assets (NFA) declined by N6.86 trillion (16.45%) month-on-month, falling from N41.66 trillion in September to N34.80 trillion in October. Despite this contraction, NFA remains N14.01 trillion higher than the same period last year, underscoring ongoing external challenges.
Money Supply Subcategories Show Varied Growth
Money supply measured as M2, which includes narrow money and quasi-money such as savings and term deposits, also rose modestly by N1.25 trillion (1.06%) to N119.03 trillion in October. Year-on-year, M2 increased by 10.22%, mirroring the broad money trend.
Narrow money (M1), representing cash and demand deposits, grew more modestly from N39.11 trillion in September to N39.35 trillion in October, a 0.61% increase. Over the past year, M1 expanded by 13.12%, or N4.56 trillion.
CBN Maintains Monetary Policy Rate to Safeguard Inflation Gains
In November 2025, the MPC opted to keep the MPR steady at 27%, reflecting a cautious approach to managing liquidity while preserving the disinflation progress achieved. CBN Governor Olayemi Cardoso announced the unanimous decision at the committee’s 303rd meeting in Abuja, emphasizing the need for more time to assess the impact of prior policy adjustments.
Policy Adjustments and Regulatory Ratios
The committee revised the interest rate corridor to +50/-450 basis points around the benchmark rate and maintained the Cash Reserve Ratio (CRR) at 45% for deposit money banks, 16% for merchant banks, and 75% for non-Treasury Single Account (TSA) public-sector deposits. The liquidity ratio was held steady at 30%.
These measures aim to consolidate the gains in achieving low and stable inflation, with future policy decisions to be guided by empirical data and evolving economic conditions.
Inflation Trends and Economic Outlook
Inflation has steadily declined for seven consecutive months, dropping from 34% a year ago to 16.05% in October 2025. Food inflation eased to 13.12% from 16.87%, while core inflation moderated to 18.69%. The CBN attributes this improvement to sustained monetary tightening, enhanced foreign exchange market stability, increased capital inflows, and relatively stable fuel prices.
Governor Cardoso Highlights Importance of Macroeconomic Stability
At the press briefing, Governor Cardoso underscored that achieving price stability is only the initial milestone. “Macroeconomic stability and the benefits it brings are fundamental,” he stated. “Stability lays the groundwork for sustainable economic growth and development.”
