Nigeria's economic landscape witnessed significant monetary expansion as the country's broad money supply climbed to N119.04 trillion in October 2025, according to recent data released by the Central Bank of Nigeria.
Monthly and Yearly Growth Patterns
The latest figures show a noticeable increase from the N117.78 trillion recorded in September 2025, representing a month-on-month growth of N1.25 trillion or 1.06%. When compared year-over-year, the money supply demonstrated even stronger expansion, rising by 10.22% from the N107.99 trillion documented in October 2024.
This upward movement reverses the previous month's slowdown and coincides with the Monetary Policy Committee's September decision to cut the Monetary Policy Rate by 50 basis points to 27%. This marked the first interest rate reduction since 2020, signaling a potential shift in the central bank's approach to monetary management.
Diverging Domestic and Foreign Asset Trends
A deeper analysis of the components reveals contrasting patterns between domestic and foreign assets. Net domestic assets experienced substantial growth, jumping from N76.12 trillion in September to N84.23 trillion in October. This represents an impressive increase of N8.11 trillion or 10.65% within a single month.
The surge in domestic assets reportedly stemmed from improved domestic credit conditions, increased government borrowing activities, and enhanced lending by commercial banks to private sector entities. This domestic strength, however, contrasted sharply with developments in the external sector.
Net foreign assets declined significantly, falling from N41.66 trillion to N34.80 trillion during the same period. This represents a substantial decrease of N6.86 trillion or 16.45% month-on-month, indicating renewed external pressures on the Nigerian economy. Despite this recent decline, the figure remains N14.01 trillion higher than the level recorded in October 2024.
Broader Monetary Aggregates and Policy Implications
The Central Bank data also revealed movements in other key monetary measures. M2 money supply, which encompasses cash, savings, and deposit balances used for routine transactions, increased from N117.77 trillion in September to N119.03 trillion in October. This growth of N1.25 trillion or 1.06% mirrors the broader money supply trend.
Compared to October 2024, M2 expanded by N11.04 trillion or 10.22%, reflecting sustained monetary growth over the twelve-month period. Meanwhile, narrow money (M1) showed more modest growth, rising from N39.11 trillion in September to N39.35 trillion in October. This represents an increase of N239 billion or 0.61%, with a year-on-year growth of N4.56 trillion or 13.12%.
The Monetary Policy Committee's subsequent decision in November 2025 to maintain the MPR at 27% reflects the central bank's cautious approach to balancing liquidity control with inflation management. Following the 303rd MPC meeting in Abuja, CBN Governor Olayemi Cardoso announced that all twelve committee members agreed to maintain the current monetary stance, arguing that earlier measures required more time to take full effect.
The committee also revised the corridor around the policy rate to +50/-450 basis points and maintained several key ratios unchanged, including the Cash Reserve Ratio at 45% for deposit money banks, 16% for merchant banks, and 75% for non-TSA public-sector funds. The liquidity ratio remained at 30%, with the committee emphasizing the importance of preserving gains made in stabilizing inflation.
Historical context reveals the substantial scale of monetary expansion over recent years. Money supply has surged by 75.9% from N66.944 trillion in September 2023 to the current N117.783 trillion. A more detailed breakdown shows that money supply in the first half of 2025 stood at N64.906 trillion in September 2023, compared to N117.250 trillion in the same period in 2025, marking an 80.6% increase.
Economic analysts have expressed concerns that such significant increases in money supply without corresponding growth in available goods and services could pose challenges for price stability and overall economic health. The diverging trends between strengthening domestic assets and weakening foreign assets highlight the complex balancing act facing Nigerian monetary authorities as they navigate both internal and external economic pressures.
