Nigeria’s broad money supply rose to N119.52 trillion in August 2025, reflecting continued expansion in financial system liquidity despite inflationary headwinds and currency volatility.
According to the latest data released by the Central Bank of Nigeria (CBN), the August figure represents a sharp rise from N117.4 trillion recorded in June and a year-on-year increase from N107 trillion in August 2024. The report, however, omitted figures for July.
The growth highlights the complex monetary environment the apex bank is grappling with, as it balances credit expansion with efforts to stabilize the naira and rein in inflation.
Net Assets, Domestic Credit Drive Liquidity Growth
The data also revealed that Nigeria’s net foreign assets (NFA) inched up to N40.9 trillion in August, compared with N40.7 trillion in June, indicating a modest improvement in external reserves despite global financial pressures.
On the domestic side, net domestic assets (NDA) surged to N78.58 trillion in August, from N76.8 trillion in June. The increase, according to the CBN, was largely driven by credit growth to both the government and the private sector.
This dual expansion in NFA and NDA underpinned the overall increase in money supply (M2), reinforcing concerns that excess liquidity could continue to exert pressure on consumer prices and exchange rate stability.
The report further showed a decline in narrow money (M1), which includes cash in circulation and demand deposits. M1 fell to N39.3 trillion in August from N39.9 trillion in June. This contraction suggests reduced cash availability in the economy, possibly due to tighter monetary policies or a shift by Nigerians toward savings and longer-term deposits.
The CBN noted that while M1 contracted, quasi-money—comprising savings and time deposits—expanded, resulting in the overall increase in M2. This trend indicates a growing preference among Nigerians to hold funds in savings accounts rather than cash, even as inflationary pressures persist.
