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Nigeria’s money supply surged to N122.95 trillion in November 2025, up from N119.04 trillion in October, showing that more cash and credit are circulating in the economy despite the Central Bank of Nigeria (CBN) keeping interest rates high.
According to the latest CBN data, the banking system remains flush with liquidity, meaning banks have more money to lend. “Liquidity conditions in the system remain accommodative even as the apex bank maintains elevated policy rates,” the report said, highlighting the balancing act the CBN faces between boosting growth and controlling inflation.
The increase in broad money supply (M3) came from both domestic and foreign sources. Net domestic assets (NDA) rose to N85.57 trillion in November from N84.23 trillion in October, reflecting more lending by banks to the government and private sector.
At the same time, net foreign assets (NFA) climbed sharply to N37.38 trillion from N34.80 trillion, more than doubling from N17.35 trillion a year ago. This points to stronger foreign exchange inflows and a healthier external reserve position, giving the CBN more room to support the naira.
Other measures of money supply followed the same trend. M2, which tracks cash and short-term deposits, increased to N122.94 trillion, while M1, which represents cash and transactional balances, rose to N40.53 trillion from N39.35 trillion, showing that more money is being used in daily transactions.
The surge comes amid recent policy moves by the CBN. In September 2025, the Monetary Policy Committee (MPC) cut the Monetary Policy Rate (MPR) by 50 basis points to 27%, citing easing inflation and improved forex conditions.
By November, the MPC kept the rate at 27%, signaling caution as liquidity continued to expand.
Analysts note that rising NDA usually reflects higher government borrowing, more credit to businesses and households, or banks shifting focus to domestic lending. Meanwhile, the growth in NFA suggests better external sector performance, supported by higher foreign inflows and stronger reserves.
While the increase in money supply supports lending and economic activity, it also raises the risk of too much liquidity, which can put pressure on inflation and exchange rates. “The simultaneous growth in domestic and foreign assets shows that Nigeria’s liquidity is being boosted both by local lending and improved external conditions,” experts said.
From analysts’ perspective, Nigeria’s financial system is currently awash with cash, helping growth and lending, but the CBN must carefully manage the flow to avoid inflationary pressures and protect the naira.
