Nigeria’s Money Supply Climbs to N129.21 Trillion as Liquidity Expands Despite Tight Monetary Policy

Nigeria’s broad money supply (M3) rose to N129.21 trillion in May 2026, highlighting continued liquidity growth in the economy despite the Central Bank of Nigeria’s efforts to keep monetary conditions tight. Latest figures released by the Central Bank of Nigeria (CBN) showed that money supply increased from N124.99 trillion recorded in April, representing a 3.38 percent month-on-month growth. Compared to the N119.20 trillion reported in May 2025, the latest figure also reflects a steady year-on-year expansion in the country’s money stock.

The rise in money supply was largely driven by growth in quasi-money and stronger asset positions within the financial system. Quasi-money, which includes savings and time deposits, climbed to N84.58 trillion in May from N81.22 trillion in April. Meanwhile, narrow money, comprising currency in circulation and demand deposits, also increased to N129.20 trillion during the review period, indicating that liquidity remained robust across various segments of the economy.

Data from the apex bank further revealed that Nigeria’s net foreign assets recorded a significant jump, rising to N26.95 trillion in May from N24.01 trillion in April. At the same time, net domestic assets increased to N102.26 trillion from N100.97 trillion. Analysts say the improvement in foreign assets suggests stronger external asset accumulation within the banking system, while growth in domestic assets points to continued expansion in credit and other financial holdings.

The broad-based increase in both foreign and domestic assets underscores the factors supporting the growth in money supply even as interest rates remain elevated. CBN Bills held by money-holding sectors also edged higher to N9.66 billion from N9.65 billion, reflecting ongoing liquidity management activities. The latest figures suggest that liquidity conditions remain relatively accommodative despite monetary tightening measures aimed at curbing inflation.

The development comes as the Central Bank of Nigeria retained its benchmark Monetary Policy Rate (MPR) at 26.50 percent during its 305th Monetary Policy Committee meeting held in May 2026. While the bank continues to prioritize price stability and disinflation, the persistent expansion in monetary aggregates highlights the challenge of balancing economic growth with inflation control and exchange rate stability. Going forward, the trajectory of money supply is expected to remain a key indicator for policymakers assessing the health and direction of Nigeria’s economy.

source: nairametrics