Table of Contents
- Nigeria’s Money Supply Decline
- Central Bank Decision
- Year-on-Year Increase
- Foreign Assets
- Understanding M3
- CBN Governor's Statement
Nigeria's broad money supply (M3) decreased to N117.78 trillion in September 2025, reflecting a 1.6 percent drop from N119.69 trillion in August.
This information is based on recent data released by the Central Bank of Nigeria (CBN).
The decrease occurred following the CBN Monetary Policy Committee's decision to lower the Monetary Policy Rate (MPR) during its 302nd meeting.
Nevertheless, despite the monthly reduction, M3 has increased by 7.6 percent year-on-year compared to N109.41 trillion in September 2024, indicating a reasonable balance between long-term liquidity growth and short-term tightening pressures.
Furthermore, foreign assets rose slightly to N41.66 trillion from N41.59 trillion in August, marking a 0.2 percent increase.
According to DAILY POST, M3 includes M2 (currency, demand deposits, and quasi-money) along with other broad components and is affected by net domestic assets and net foreign assets.
It is worth noting that CBN Governor Olayemi Cardoso, at the conclusion of the last MPC meeting, adjusted the Standing Facilities corridor to +250/-250 basis points, increased the Cash Reserve Requirement (CRR) for commercial banks to 45 percent, and implemented a 75 percent CRR on non-TSA public sector deposits, while maintaining the Liquidity Ratio at 30 percent.
Frequently Asked Questions
What is M3 in the context of Nigeria's economy?
M3 is a measure of a country's money supply, which includes M2 (currency, demand deposits, and quasi-money) along with other broad components. It reflects the total amount of money available in the economy.
Why did the Central Bank of Nigeria lower the Monetary Policy Rate?
The Central Bank of Nigeria lowered the Monetary Policy Rate to manage inflation and stimulate economic activity, aiming to balance liquidity and tightening pressures in the economy.
How does the increase in foreign assets affect Nigeria's economy?
An increase in foreign assets can strengthen Nigeria's financial position, improve the country's ability to manage external shocks, and enhance the overall economic stability.
