Nigeria’s broad money supply (M3) rose to a historic level of N114.2 trillion in March 2025 as liquidity expansion despite sustained monetary tightening by the Central Bank of Nigeria.
According to newly released data from the apex bank, the money supply increased by 23.9 percent compared to N92.18 trillion in March 2024.
On a monthly basis, it grew by 3.2 percent from N110.7 trillion recorded in February 2025.
The rise in M3, which captures total money in circulation, comes amid the Central Bank’s aggressive interventions to control inflation and stabilise exchange rate volatility.
In March, the CBN conducted open market operations to withdraw N1.7 trillion from the banking system. Despite this effort, liquidity continued to rise due to expanded credit flows and increased government borrowing.
Credit to the government rose sharply year-on-year by 28.9 percent to N25.85 trillion although there was a decline of 4.6 percent from the February level of N27.11 trillion.
Meanwhile, credit to the private sector increased by 6.8 percent to N76.26 trillion from N71.43 trillion in March 2024.
Currency in circulation grew to N5 trillion in March, representing a 29.5 percent increase compared to N3.86 trillion a year earlier. Currency held outside the banking system also expanded by 26.8 percent to N4.59 trillion from N3.62 trillion over the same period.
The Central Bank has raised the Monetary Policy Rate by a cumulative 875 basis points over the past year, moving from 18.75 percent to 27.50 percent in an effort to anchor inflation expectations and attract capital inflows.
However, inflation remains stubbornly high, rising to 24.23 percent in March after briefly easing to 23.18 percent in February.
Analysts have noted that while tightening measures are in place, structural liquidity drivers continue to push monetary aggregates higher.
The Central Bank has maintained its position that a sustained rules-based framework will be essential to delivering price stability. With inflationary pressures persisting despite higher interest rates, further policy responses may be required to contain excess liquidity and improve overall macroeconomic balance.
