Money Supply Rises To N138.78tr Despite Tighter Credit

Nigeria’s broad money supply expanded sharply in July, reaching N138.78 trillion as a surge in net foreign assets drove monetary growth despite a decline in domestic credit.

The latest monetary statistics from the Central Bank of Nigeria (CBN) showed that broad money, measured as M3, rose by N5.52 trillion, or 4.14 percent, from N133.25 trillion in June.

The July figure was also 16 percent higher than the N119.89 trillion recorded in the corresponding month of 2025.

M3, which captures currency outside banks as well as demand, savings and time deposits and foreign currency deposits, has maintained an upward trend this year. It increased from N123.95 trillion in January to N138.78 trillion in July.

The latest monthly expansion was largely supported by developments in the external position of the banking system. Net foreign assets jumped from N26.53 trillion in June to N37.71 trillion in July, representing an increase of N11.18 trillion, or 42.15 percent.

The increase in foreign assets more than offset the contraction in net domestic credit during the month. Net domestic credit fell by N5.66 trillion, or 5.30 percent, from N106.73 trillion in June to N101.07 trillion in July.

The contrasting movements indicate that the July increase in overall liquidity was accompanied by a reduction in domestic credit.

The broader monetary expansion was also reflected in M2, which rose to N138.77 trillion in July from N133.24 trillion in June.

M3 had stood at N123.12 trillion in February before rising to N124.99 trillion in April, N129.21 trillion in May and N133.25 trillion in June.

The continued increase in the monetary aggregates points to growing liquidity across the financial system, although the composition of that liquidity remains relevant to its possible effects on inflation, credit and economic activity.