Nigeria’s money supply (M²) fell month-on-month to about ₦118 trillion in September 2025, down from ₦119.7 trillion in August, according to the Central Bank of Nigeria (CBN).

The apex bank disclosed this in its Money and Credit Statistics Data for September 2025, attributing the decline primarily to a drop in banks’ credit to the economy amid continued monetary tightening aimed at curbing inflation.

According to the report, overall credit to the economy fell by 2.1 per cent month-on-month to ₦96.7 trillion in September from ₦98.8 trillion in August, reflecting the CBN’s restrictive policy stance.

The decline was driven by a 4.4 per cent contraction in banks’ credit to the private sector, which dropped to ₦72.5 trillion from ₦75.9 trillion during the same period.

The impact of the contraction was only partially offset by a 5.67 per cent rise in credit to the government, which increased to ₦24.2 trillion in September from ₦22.9 trillion in August.

The CBN noted that the tightening of liquidity was part of its ongoing effort to tame inflation, which has remained stubbornly high despite multiple interest rate hikes. Since mid-2023, the Monetary Policy Rate (MPR) has been raised by over 800 basis points.

A breakdown of the data showed that Narrow Money (M¹) declined by 0.76 per cent month-on-month to ₦39.1 trillion in September from ₦39.4 trillion in August, while Quasi Money dipped by 1.99 per cent to ₦78.7 trillion from ₦80.3 trillion in the same period.

Similarly, Demand Deposits fell by 0.86 per cent to ₦34.6 trillion from ₦34.9 trillion, while Currency Outside Banks (CoB) was the only component that recorded an uptick — rising slightly by 0.45 per cent to ₦4.47 trillion in September from ₦4.45 trillion in August.

Analysts say the decline in money supply underscores the CBN’s firm stance on monetary tightening, even as the economy grapples with reduced liquidity and sluggish private sector credit growth.

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