Nigeria’s money supply surged in August 2025, but government borrowing fell sharply, revealing shifting liquidity trends with mixed economic effects.
The Central Bank of Nigeria (CBN) reported that broad money (M3) rose to ₦119.52 trillion in August, driven by quasi-money balances at ₦80.21 trillion as households and firms favored interest-bearing deposits. Narrow money (M1) was smaller at ₦39.30 trillion, reflecting a preference for safer bank-held funds over physical cash.
Meanwhile, government borrowing dropped 25.74% year-on-year to ₦23.13 trillion, while private sector credit remained modest at ₦75.83 trillion. Rising net foreign assets at ₦40.94 trillion also boosted liquidity.
The CBN introduced new monetary tools, including a 75% CRR on certain public deposits and a revised corridor for standing facilities, aiming to manage liquidity pressures.
Overall, while liquidity is growing, limited private lending and weaker government borrowing suggest economic expansion may remain muted in the short term.
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