Nigeria’s broad money supply has declined for the third consecutive month this year, slipping slightly to N117.4 trillion in June 2025, according to the latest data from the Central Bank of Nigeria (CBN).
The figure represents a 1.27% month-on-month drop, falling from N119 trillion in May 2025 to N117.4 trillion in June 2025.
This marks a continuation of the downward trend that began earlier in the year.
The first decline of 2025 was recorded in February, when broad money supply fell to N110.32 trillion from N110.94 trillion in January. Since then, intermittent drops have signaled 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.
Net foreign assets drop to N40.7 trillion
The CBN data also shows that the net foreign assets dropped to N40.7 trillion in June 2025 from N45.8 trillion in May 2025.
The contraction suggests that Nigeria’s external asset position weakened, possibly due to the decline in the FX reserves.
However, net domestic assets rose to N76.8 trillion in June 2025 from N73.2 trillion in May 2025. This increase partially offset the fall in external assets and prevented a steeper decline in total money supply.
This interplay between domestic and foreign asset movements illustrates the delicate balancing act the CBN is managing injecting or mopping up liquidity while maintaining FX stability and curbing inflation.
M2 also declined
The money supply (M2) also fell to N117.4 trillion in June from N118.9 trillion in May 2025. The decline mirrored the trend in M3 and suggests a broader tightening in monetary conditions.
The narrow money (M1) also fell to N39.9 trillion in June 2025 from N40.4 trillion in May 2025.
The reduction in M1 points to reduced cash availability, possibly driven by reduced government spending, higher interest rates, or seasonal shifts in liquidity demand.
What you should know
The increase in domestic assets may suggest that domestic liquidity driven by bank credit, government borrowing, and CBN’s net claims may have tightened, possibly as part of broader efforts to rein in inflation.
- The increase in foreign assets likely reflects the accumulation of FX reserves, increased oil receipts, and improved external financing conditions following debt issuances and policy reforms. However, the picture is not entirely positive.
- The CBN’s recent monetary tightening including the high Monetary Policy Rate (MPR) and more aggressive use of Open Market Operations (OMO) is starting to be reflected in the data.
The June decline in money supply, particularly in the most liquid components like M1, points to early success in efforts to reduce excess liquidity and tame inflationary pressures.
