Nigeria’s broad money supply (M3) rose by 24 percent to a record N114.2 trillion in March 2025, defying the Central Bank of Nigeria’s (CBN) aggressive monetary tightening policies designed to curb inflation and stabilise the economy.
The M3 figure, which represents the most comprehensive measure of money circulating within the economy, encompasses cash, large-scale deposits, and financial assets that influence lending, investment, and price levels.
CBN data reveals a 23.9 percent year-on-year increase from N92.18 trillion in March 2024, with a 3.2 percent month-on-month rise from N110.70 trillion in February 2025.
In March alone, the apex bank withdrew N1.7 trillion from circulation through Open Market Operations (OMO) auctions as part of liquidity management efforts. Analysts at Afrinvest Securities Limited noted that these measures were aimed at reducing excess liquidity and taming inflationary pressures.
Credit Growth and Currency Trends
Bank credit to the government expanded by 28.9 percent year-on-year to N25.85 trillion, though it declined by 4.6 percent month-on-month from N27.11 trillion in February. Meanwhile, private sector credit grew modestly by 6.8 percent year-on-year to N76.26 trillion, with a negligible 0.01 percent monthly increase.
Currency in circulation surged by 29.5 percent year-on-year to N5.00 trillion but dipped slightly from N5.03 trillion in February. Similarly, cash held outside banks rose by 26.8 percent year-on-year to N4.59 trillion, increasing by 1.8 percent month-on-month.
Monetary Policy and Inflation Dynamics
The CBN has maintained an aggressive stance, raising the Monetary Policy Rate (MPR) from 11.5 percent in 2021 to 27.5 percent as of March 2025, with an 875 basis-point hike in the past year alone.
While inflation eased from 24.48 percent in January to 23.18 percent in February, it rebounded to 24.23 percent in March, indicating persistent price pressures despite the CBN’s efforts.
The sustained growth in money supply amid tightening measures highlights the challenges facing monetary authorities in stabilising Nigeria’s economy.
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