Nigeria’s broad money supply (M3) rose to N114.22 trillion in March 2025, up by 24% year-on-year from N92.19 trillion in the same month of 2024, according to the latest data from the Central Bank of Nigeria (CBN).
The surge in money supply comes amid rising inflationary pressures, with headline inflation climbing to 24.23% in March.
On a month-on-month basis, M3 rose by 3.2% from N110.71 trillion in February. This was largely driven by a sharp increase in net foreign assets (NFA), which jumped by 38.9% to N45.17 trillion, signalling stronger capital inflows and improved external liquidity.
Meanwhile, net domestic assets (NDA) declined by 11.7% to N69.05 trillion, suggesting tighter liquidity on the domestic front.
The surge in money supply coincided with a spike in inflation. Data from the National Bureau of Statistics (NBS) shows that headline inflation rose to 24.23% in March, up from 23.18% in February. This represents a 1.05 percentage point increase year-on-year.
A rate hike would be aimed at reining in inflation by curbing excess liquidity and managing demand. However, tightening too aggressively could slow economic recovery and increase the cost of borrowing for businesses and households.
The CBN faces a delicate balancing act. Broad money supply is rising on the back of stronger foreign inflows, but inflation is moving faster than expected. While growing NFA may support naira stability, the declining domestic asset base and higher consumer prices will likely dominate policy discussions at the upcoming MPC meeting.