Nigeria’s Money Supply (M²) declined by 1.58 percent month-on-month to N117.8 trillion in September 2025, down from N119.7 trillion in August, according to the Central Bank of Nigeria’s (CBN) latest Money and Credit Statistics report.
The drop was largely driven by a 5 percent contraction in banks’ credit to the economy, which fell to N96.7 trillion in September from N98.8 trillion in August. The CBN noted that most components of the money supply recorded declines during the period, except Currency Outside Banks (CoB).
Quasi Money, which includes savings and time deposits, dropped by 1.99 percent to N78.7 trillion in September, compared to N80.3 trillion in August. Narrow Money (M¹), comprising demand deposits and currency in circulation, also fell by 0.76 percent to N39.1 trillion.
Demand Deposits alone declined by 0.86 percent to N34.6 trillion, while Currency Outside Banks edged up slightly by 0.45 percent to N4.47 trillion.
The contraction in credit to the economy was primarily due to a 4.4 percent decline in banks’ credit to the private sector, which dropped to N72.5 trillion from N75.9 trillion. This outweighed the 5.67 percent increase in credit to the government, which rose to N24.2 trillion from N22.9 trillion.
The CBN attributed the overall decline in money supply and credit to its ongoing monetary tightening measures aimed at curbing inflation. Since mid-2023, the apex bank has raised the Monetary Policy Rate (MPR) by over 800 basis points, significantly tightening liquidity in the banking system.
These measures are part of broader efforts to stabilize prices and restore macroeconomic balance amid persistent inflationary pressures.
