Money supply drops to N118trn as banks’ credit falls

Nigeria’s Money Supply (M²) dropped month-on-month to about ₦118 trillion in September 2025. The Central Bank of Nigeria (CBN) disclosed this in its Money and Credit Statistics Data for September 2025, which indicated that the various components of the money supply recorded a decline during the period, except Currency outside Banks.
According to the apex bank, the drop, driven by a five per cent decline in banks’ credit to the economy, was from ₦119.7 trillion in August 2025.
The decline in credit to the economy and Money Supply reflects the impact of the CBN’s aggressive monetary tightening stance aimed at reining in inflation, which has remained in double digits despite several rounds of interest rate hikes. The apex bank has raised the Monetary Policy Rate (MPR) by more than 800 basis points since mid-2023, tightening liquidity across the banking sector. Narrow Money (M¹), also declined by 0.76 percent MoM to ₦39.1 trillion in September from ₦39.4 trillion in August.
Quasi Money decreased by 1.99 percent MoM to ₦78.7 trillion in September from ₦80.3 trillion in August. Likewise, Demand Deposits fell by 0.86 percent MoM to ₦34.6 trillion in September from ₦34.9 trillion in August. But Currency outside Banks, COB rose slightly by 0.45 percent MoM to ₦4.47 trillion in September from ₦4.45 trillion in August. The decline in money supply is driven by a 2.1 percent MoM decline in credit to the economy to ₦96.7 trillion in September from N98.8 trillion in August. This follows a 4.4 per cent MoM decline in banks’ credit to the private sector, which fell to ₦72.5 trillion in September from ₦75.9 trillion in August. The decline subdued the impact of a 5.67 per cent increase in credit to the government to ₦24.2 trillion in September from ₦22.9 trillion in August.