Domestic Assets Surge Push Nigeria’s Money Supply To N124.99tn

Nigeria’s broad money supply (M3) rose to N124.99tn in April 2026, driven largely by a significant increase in domestic assets, underscoring continued liquidity expansion within the financial system despite a decline in the country’s net foreign asset position.

Latest monetary statistics showed that broad money supply increased by N1.87tn from N123.12tn
recorded in February 2026, reflecting sustained growth in liquidity available for spending, investment and lending across the economy.

The data highlights the resilience of domestic liquidity conditions at a time when monetary authorities are pursuing a delicate balance between curbing inflationary pressures and supporting economic growth.

Broad money supply, commonly referred to as M3, is a key measure of money circulating within an economy. It includes currency held by the public, demand deposits, savings and time deposits, as well as foreign currency-denominated deposits. Economists often monitor the indicator to assess liquidity trends, inflationary risks and the effectiveness of monetary policy.

A breakdown of the figures revealed that Nigeria’s money supply has continued to expand on both a monthly and annual basis.

On a year-on-year basis, M3 increased by N5.77tn, rising from N119.22tn in April 2025 to N124.99tn in April 2026.

Similarly, narrow money supply (M2), which excludes certain longer-term financial assets but captures highly liquid monetary instruments, rose to N124.98tn in April from N123.11tn in February, further reflecting increased liquidity in the banking system.

The growth in money supply was primarily supported by a sharp rise in net domestic assets, which climbed to N100.97tn in April 2026 from N97.55tn recorded two months earlier.

The increase suggests stronger domestic credit creation and liquidity generation within the economy, offsetting pressures from external asset movements.

In contrast, net foreign assets declined to N24.01tn in April from N25.57tn in February, indicating a weaker external asset position during the period.

Analysts note that fluctuations in foreign assets often reflect changes in foreign exchange reserves, external capital flows and exchange rate dynamics.

The contrasting movement between domestic and foreign assets suggests that liquidity growth in the Nigerian economy is increasingly being driven by domestic financial system activities rather than external asset accumulation.

The latest monetary data comes amid cautious policy adjustments by the Central Bank of Nigeria (CBN), which has sought to maintain macroeconomic stability while fostering conditions for economic recovery and investment growth.

At its 304th Monetary Policy Committee (MPC) meeting held in February 2026, the apex bank reduced the Monetary Policy Rate (MPR) by 50 basis points to 26.5 per cent from 27 per cent, marking a shift toward a more accommodative policy stance after an extended period of aggressive tightening aimed at combating inflation.

The MPC, however, retained other key policy parameters, including the Cash Reserve Ratio (CRR) at 45 per cent for commercial banks and 16 per cent for merchant banks. The Liquidity Ratio was also maintained at 30 per cent, while the asymmetric corridor around the MPR remained unchanged at +50 and -450 basis points.

Market analysts say the continued expansion in money supply will remain a key indicator for policymakers as they monitor inflation trends, exchange rate stability and economic growth prospects. While stronger liquidity can support credit expansion and business activity, excessive growth in money supply could also complicate efforts to rein in inflation if not matched by corresponding increases in productive output.

With domestic assets continuing to strengthen, attention will remain focused on how monetary authorities manage liquidity conditions in the months ahead to sustain economic growth without undermining price stability.