Nigeria’s Broad Money Supply Reaches N129.21 Trillion Amid Tight Monetary Policy
Nigeria’s broad money supply (M3) rose to N129.21 trillion in May 2026, signaling ongoing liquidity expansion in the economy, even as the Central Bank of Nigeria (CBN) upholds a strict monetary policy approach.
Broad money (M3) encompasses currency in circulation outside banks, demand deposits, savings deposits, term deposits, and foreign currency deposits.
According to the latest figures from the CBN, M3 grew from N124.99 trillion in April 2026 to N129.21 trillion in May, marking a month-on-month increase of 3.38%. This growth also represents a year-on-year rise from N119.2 trillion in May 2025, highlighting a consistent upward trend in money stock over the past year.
Drivers of Money Supply Growth
The expansion of broad money supply was bolstered by gains in quasi-money, net foreign assets, and net domestic assets during the reviewed period.
Narrow money (M2), which includes currency in circulation along with demand deposits, saw an increase to N129.2 trillion from N124.98 trillion in April. Meanwhile, semi-money rose from N81.22 trillion in April to N84.58 trillion in May, and the CBN banknotes held by the currency holding sector increased slightly from N9.65 billion to N9.66 billion.
This data indicates that liquidity conditions remain accommodating despite recent interest rate hikes designed to combat inflationary pressures.
Analysis of Asset Positions
Further examination revealed that both foreign and domestic asset positions played a significant role in the growth of the money supply.
Net external assets surged from N24.1 trillion in April to N26.95 trillion in May, while domestic net worth also grew from N100.97 trillion to N102.26 trillion during the same timeframe.
The increase in net foreign assets demonstrates a strengthened accumulation of foreign assets within the banking sector, while the growth in domestic assets signifies that credit and other local financial holdings are on the rise. This dual increase in foreign and domestic assets underscores the multifaceted forces propelling the rise in money supply.
The CBN’s Monetary Policy Considerations
The recent money supply statistics emerge as the CBN maintains its benchmark interest rate at 26.50%. During the 305th Monetary Policy Committee (MPC) meeting held on May 19-20, 2026, the CBN unanimously decided to preserve the Monetary Policy Rate (MPR) at this level, alongside maintaining other key monetary parameters to foster disinflation and macroeconomic stability. Despite the tightening policy framework, monetary aggregates are continuing to grow, suggesting a potential increase in liquidity within the financial landscape.
Earlier in September 2025, the MPC had cut the MPR by 50 basis points to 27% in response to easing inflationary pressures and to support economic activity.
As policymakers navigate the delicate balance between stimulating economic growth and managing inflation and foreign exchange stability, the growth of broad money supply remains a crucial metric for decision-making in Nigeria’s financial ecosystem.
