Nigeria’s broad money supply surged to an all-time high of ₦119.11 trillion in April 2025, marking one of the sharpest monthly increases in recent quarters. Data from the Central Bank of Nigeria (CBN) showed this figure represented a 22.9% rise from ₦96.97 trillion in April 2024 and a 4.3% increase from ₦114.22 trillion in March 2025.
This expansion occurred despite the CBN’s continued tight monetary stance. In its May 2025 meeting, the Monetary Policy Committee (MPC) kept the Monetary Policy Rate steady at 27.5%, halting rate hikes for the second time this year.
Although headline inflation dropped slightly to 23.71% in April from 24.23% in March, the persistent rise in liquidity poses a risk to recent progress in price stability if not carefully managed.
The MPC acknowledged that inflation remains elevated and maintained a hawkish outlook while opting to observe the impact of earlier rate increases.
Growth in both net foreign and net domestic assets drove the expansion in money supply. Net foreign assets climbed to ₦47.76 trillion in April, up 66.3% from ₦28.73 trillion in April 2024 and 5.7% from ₦45.17 trillion in March.
The CBN linked this rise to improved foreign exchange inflows, likely supported by crude oil earnings, remittances, and multilateral funding. The bank’s foreign exchange market reforms and improved dollar liquidity also appeared to boost external reserves.
Net domestic assets rose to ₦71.34 trillion in April, a more modest 4.5% increase from ₦68.25 trillion in April 2024 and 3.3% from ₦69.05 trillion in March. The slower growth indicates that high interest rates may still be dampening private sector credit expansion.
M2 money supply, which includes savings and demand deposits but excludes long-term instruments, mirrored M3’s trajectory. M2 rose to ₦119.08 trillion in April—22.8% higher year-on-year and 4.3% above March’s ₦114.20 trillion.
The near-parity between M2 and M3 suggests that long-term deposits played a minor role in liquidity growth, leaving most of the expansion concentrated in more liquid, short-term instruments.
Narrow money (M1), which includes currency in circulation and demand deposits, also climbed to ₦41.01 trillion in April. This marked a 21.3% rise from ₦33.82 trillion a year earlier and a 6.4% jump from ₦38.55 trillion in March.
With M3 and M2 increasing over 22% annually, and M1 rising by more than 6% month-on-month, the CBN now faces the challenge of containing inflation and safeguarding the naira’s stability.
Although higher net foreign assets offer some protection against external shocks, any renewed inflationary pressures could push the central bank towards further tightening in the near future.
