The rate of growth of Nigeria’s money supply slowed to a four-year low of 12.83 percent in November 2025, following aggressive liquidity mop-up by the Central Bank of Nigeria (CBN) aimed at reining in inflationary pressures.
Adebowale Funmi, head of Research at Parthian Securities, said from an economic standpoint, slower money supply growth is positive for inflation control as it helps to reduce excess demand pressures and supports the ongoing moderation in price increases.
Nigeria’s headline inflation rate continued its downward trajectory in November 2025, easing to 14.45 percent from 16.05 percent in October, reflecting the impact of tighter monetary conditions. The CBN mopped up about N33.12 trillion from the system in 2025 through Open Market Operations and other liquidity management tools.
Despite the slowdown in growth, the stock of money in the system remained elevated. Broad money supply (M3), which measures the total amount of money in the economy, climbed to an all-time high of N122.9 trillion in November 2025, compared with N108.97 trillion in November 2024, representing a 12.83 percent increase, albeit at a significantly reduced pace.
The CBN data showed that M3 increased by N3.9 trillion, or 3.3 percent, from N119.03 trillion in October 2025 to its November level, suggesting a continued build-up of liquidity toward the end of the year.
Ayokunle Olubunmi, head of Financial Institutions Ratings at Agusto & Co., said the sharp slowdown in money supply growth reflects the CBN’s tight and contractionary monetary stance throughout most of 2025. He noted that for a large part of the year, the apex bank maintained aggressive tightening measures, including raising the Cash Reserve Ratio (CRR) to 50 percent and keeping the Monetary Policy Rate (MPR) elevated, alongside frequent Open Market Operations to mop up excess liquidity.
According to him, these measures, many of which were also designed to stabilise the foreign exchange market, have significantly constrained liquidity in the financial system. “The decline in headline money supply is a direct outcome of the CBN’s contractionary monetary actions,” he said, adding that economic activity has increasingly been shaped by restricted liquidity conditions.
