Nigeria’s money supply continued to rise in March 2025, hitting N114.22 trillion, despite strict monetary policies by the Central Bank of Nigeria (CBN), including a record high 50% Cash Reserve Ratio (CRR).
According to the CBN’s latest money and credit report, this figure marks a 24% increase from N92.19 trillion recorded in March 2024 and a 3.2% jump from February 2025. The rise was driven mainly by a 38.9% increase in net foreign assets, reaching N45.17 trillion, pointing to stronger capital inflows. In contrast, net domestic assets fell by 11.7% to N69.05 trillion, reflecting tighter liquidity within Nigeria.
The growth in broad money suggests that rising foreign assets and government credit are outweighing the CBN’s efforts to limit liquidity. Overall, the money supply (M3) grew by 2.8% in the first quarter of 2025.
Currency outside banks also grew sharply, with N4.6 trillion in cash circulating outside the banking system in March 91.9% of total currency in circulation. This represents a 26.7% increase from N3.63 trillion a year earlier. The trend highlights a continued public preference for physical cash, especially in the informal economy where banking access and trust remain low.
Persistent inflation and recurring banking issues such as failed transfers and poor service are pushing more Nigerians to rely on cash. Inflation rose to 24.23% in March, up from 23.18% in February, according to the National Bureau of Statistics.
Other monetary indicators also grew. M2 rose to N114.20 trillion in March, and M1 (currency and demand deposits) reached N38.55 trillion, showing a 19.7% year-on-year rise.
With inflation rising and money supply expanding, pressure is mounting on the CBN to take stronger action. The Monetary Policy Committee (MPC) is expected to meet on May 19–20, and a rate hike is likely. However, some experts warn that further tightening could hurt the economy and raise borrowing costs.
Nigeria’s Monetary Policy Rate (MPR) currently stands at 27.5%, one of the highest in the world, only behind Venezuela, Turkey, Zimbabwe and Argentina. The rate, which influences lending and deposit rates, was raised six times in 2024 alone.
The International Monetary Fund (IMF), in a recent report following its consultation in April, advised the CBN to maintain a tight stance to keep inflation in check. It also suggested that a clear disinflation plan could help guide market expectations.