Nigeria’s broad money supply rose to a record N119.11tn in April 2025, reflecting one of the sharpest monthly expansions in recent quarters, according to data from the Central Bank of Nigeria. The figure represents a 22.9 per cent increase from N96.97tn recorded in April 2024 and a 4.3 per cent rise from N114.22tn in March 2025.
The rise in money supply comes amid the CBN’s decision to maintain a tight monetary policy stance, with the Monetary Policy Committee leaving the Monetary Policy Rate unchanged at 27.5 per cent in its May 2025 meeting, pausing a string of rate hikes for the second time this year.
Although headline inflation eased marginally to 23.71 per cent in April from 24.23 per cent in March, the continued rise in liquidity could undermine recent gains in price moderation if not closely managed.
The MPC warned that inflation remains high and maintained a hawkish tone, even as it chose to monitor the effects of earlier tightening measures.
The expansion in the money supply was driven by growth in both net foreign assets and net domestic assets. Net foreign assets rose significantly to N47.76tn in April, representing a 66.3 per cent increase from N28.73tn in April 2024 and a 5.7 per cent rise from N45.17tn in March.
The CBN attributed the increase to stronger foreign exchange inflows, which may have been supported by crude oil receipts, remittances, and multilateral funding. The bank’s ongoing reforms in the foreign exchange market and improved dollar liquidity also appear to have contributed to the rise in external reserves.
Net domestic assets stood at N71.34tn in April, reflecting a more modest 4.5 per cent increase from N68.25tn a year earlier, and a 3.3 per cent rise from N69.05tn in March. The slower pace of growth in domestic assets suggests that credit expansion, particularly to the private sector, may still be restrained by elevated interest rates.
Data also showed that M2 money supply, which excludes longer-term financial instruments but includes savings and demand deposits, mirrored the M3 trend. M2 climbed to N119.08tn in April, up 22.8 per cent from N96.96tn in the same period last year and 4.3 per cent higher than the N114.20tn recorded in March.
The closeness of M2 to M3 indicates that long-term deposits contributed little to the overall increase in liquidity, leaving the bulk of the rise concentrated in short-term and easily accessible instruments.
Narrow money (M1), which includes currency in circulation and demand deposits, rose to N41.01tn in April, a 21.3 per cent increase year-on-year from N33.82tn and a 6.4 per cent rise from N38.55tn in March.
With both M3 and M2 rising more than 22 per cent year-on-year, and M1 up over six per cent month-on-month, the CBN faces a delicate task of ensuring that the rising money supply does not reverse inflation gains or weaken the naira.
Although improved net foreign assets offer a buffer against external shocks, any renewed surge in price pressures may compel the central bank to consider additional tightening in the months ahead.