Nigeria’s broad money supply (M3) declined marginally to N123.15 trillion in February 2026 from N123.36 trillion recorded in January, according to the latest money and credit statistics released by Central Bank of Nigeria (CBN). Despite the slight month-on-month drop, the data still reflects strong year-on-year expansion from N110.71 trillion in February 2025, signaling that liquidity conditions in the economy remain elevated even as policymakers attempt to manage inflationary pressures.
Broad money (M3), which measures the total stock of money available in an economy including currency in circulation, savings deposits, demand deposits, time deposits and foreign currency holdings; remains a key indicator of economic activity, lending appetite and investment capacity. The marginal decline suggests a cautious tightening of liquidity conditions, consistent with the CBN’s ongoing effort to stabilise prices, support the naira and moderate inflation expectations without choking economic growth.
A breakdown of the figures shows mixed movements across key liquidity drivers. Narrow money supply (M2), which excludes foreign currency deposits, slipped slightly to N123.14 trillion from N123.35 trillion in January, indicating mild short-term liquidity tightening. Net foreign assets declined to N28.41 trillion from N29.61 trillion, reflecting reduced external inflows and weaker foreign buffers, while net domestic assets increased to N94.74 trillion from N93.76 trillion, suggesting that local credit expansion is increasingly driving liquidity growth in the economy.
The trend highlights a gradual shift in Nigeria’s liquidity structure, with domestic credit playing a more dominant role as foreign exchange inflows remain volatile. This rebalancing comes amid broader macroeconomic adjustments, including sustained efforts by the CBN to maintain price stability while ensuring adequate funding flows to productive sectors of the economy. Policymakers have retained a relatively tight monetary stance in recent months, balancing inflation control with the need to sustain economic momentum.
Further supporting the outlook, credit to the private sector rose by about N380 billion within one month, increasing from N75.241 trillion in January to N75.62 trillion in February. Private sector credit which includes loans, trade finance and other bank exposures to businesses, is widely regarded as a measure of the banking system’s contribution to economic expansion and productive investment. The increase signals continued financial sector support for businesses despite cautious liquidity management.
Overall, the marginal decline in money supply reflects the delicate balancing act confronting monetary authorities: containing inflationary pressures, stabilising the exchange rate and sustaining credit growth without triggering excessive liquidity expansion. Developments in money supply, particularly movements in M2 and net foreign assets, will remain critical indicators of the direction of monetary policy and the broader health of Nigeria’s macroeconomic environment. Newsscroll.
QUOTE:
The trend highlights a gradual shift in Nigeria’s liquidity structure, with domestic credit playing a more dominant role as foreign exchange inflows remain volatile. This rebalancing comes amid broader macroeconomic adjustments, including sustained efforts by the CBN to maintain price stability while ensuring adequate funding flows to productive sectors of the economy
