CBN: Nigeria’s broad money supply declines for third consecutive month

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Nigeria’s broad money supply has declined for the third consecutive month, falling to N117.4 trillion in June 2025, according to data from the Central Bank of Nigeria (CBN). The figure represents a 1.27% month-on-month drop from N119 trillion in May 2025.

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The decline marks a continuation of the downward trend that began earlier in the year, with intermittent drops signaling tighter liquidity conditions in the economy. Despite the recent monthly contraction, the data shows a 15.81% year-on-year increase, with broad money supply rising from N101.4 trillion in June 2024 to N117.4 trillion in June 2025

The CBN data also reveals that net foreign assets dropped to N40.7 trillion in June 2025 from N45.8 trillion in May 2025, suggesting a weakening of Nigeria’s external asset position, possibly due to the decline in foreign exchange reserves. However, net domestic assets rose to N76.8 trillion in June 2025 from N73.2 trillion in May 2025, partially offsetting the fall in external assets.

The decline in money supply (M2) to N117.4 trillion in June from N118.9 trillion in May 2025, and the reduction in narrow money (M1) to N39.9 trillion in June 2025 from N40.4 trillion in May 2025, suggest a broader tightening in monetary conditions. The reduction in M1 points to reduced cash availability, possibly driven by reduced government spending, higher interest rates, or seasonal shifts in liquidity demand.

The CBN’s management of liquidity, foreign exchange stability, and inflation control is a delicate balancing act, and the interplay between domestic and foreign asset movements will be crucial in determining the trajectory of the economy

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