Nigeria’s money supply jumps N7.51trn in one month to N146.6trn

Nigeria’s broad money supply rose by N7.51 trillion in September 2026 to N146.6 trillion, from N139.09 trillion in August, adding to liquidity pressures as the Central Bank of Nigeria (CBN) adjusts monetary policy to support economic activity and contain inflation.

Data published on the CBN’s website showed that the increase represented monthly growth of about 5.4 per cent, highlighting the continued expansion of liquidity across the financial system.

Broad money supply, measured as M3, increased from N123.95 trillion in January to N146.6 trillion in September, representing a rise of N22.65 trillion, or approximately 18.3 per cent, in nine months.

The data showed that money supply rose to N125.19 trillion in April and N129.54 trillion in May before increasing to N133.27 trillion in June and N139.1 trillion in July. It stood at N139.09 trillion in August before reaching the September level.

Narrow money supply, which comprises currency and highly liquid deposits, also increased from N43.11 trillion in August to N44.05 trillion in September.

Currency outside banks rose from N4.87 trillion to N4.92 trillion over the same period.

Broad money captures currency outside banks, demand deposits, savings and time deposits, as well as foreign currency deposits. Its expansion reflects an increase in the stock of money within the economy, although the figures alone do not establish how much additional liquidity translated into consumer spending, productive investment or inflationary pressure.

The latest increase comes amid a shift in the CBN’s monetary policy stance following its decision to cut the benchmark Monetary Policy Rate (MPR) at its 307th Monetary Policy Committee (MPC) meeting in Abuja.

The committee reduced the MPR by 350 basis points to 23 per cent, marking the largest cut in the benchmark rate since December 2006, according to the report.

The MPC also adjusted the interest rate corridor around the MPR to plus 50 basis points and minus 300 basis points, while retaining the Cash Reserve Requirement (CRR) for commercial banks at 45 per cent.

The CRR for merchant banks remained at 16 per cent, while the 75 per cent requirement on non-Treasury Single Account (TSA) public-sector deposits was retained.

The September decision followed a period of tight monetary conditions as the CBN sought to rein in inflation and stabilise the economy.

At its 306th MPC meeting in July 2026, the committee unanimously retained the MPR at 26.5 per cent. In September 2025, it had cut the rate by 50 basis points to 27 per cent amid easing inflationary pressures before retaining it at that level in November 2025.

The combination of rising money supply and lower interest rates presents a fresh test for monetary management, as the CBN seeks to balance credit conditions that support businesses with the need to prevent excess liquidity from undermining price stability.

However, the impact of the money supply expansion on inflation will depend on factors including the pace of credit creation, the demand for money, foreign exchange conditions and the economy’s capacity to absorb additional liquidity through productive activity.