By Seun Ibiyemi
Nigeria’s broad money supply (M3) recorded a marginal decline to N123.15 trillion in February 2026, down from N123.36 trillion in January, according to the latest data released by the Central Bank of Nigeria (CBN).
Despite the slight month-on-month drop, the figure remains significantly higher than the N110.71 trillion recorded in February 2025, reflecting sustained year-on-year expansion in liquidity across the economy.
Broad money (M3), which measures total liquidity available for spending, investment and lending, includes currency in circulation, demand deposits, savings, time deposits and foreign currency holdings.
A breakdown of the data showed modest monthly adjustments across key components. Narrow money (M2), which excludes foreign currency deposits, declined slightly to N123.14 trillion from N123.35 trillion in January, pointing to a mild tightening in short-term liquidity conditions.
Net foreign assets fell to N28.41 trillion from N29.61 trillion, indicating reduced external liquidity, while net domestic assets rose to N94.74 trillion from N93.76 trillion, driven by increased domestic credit and financial sector activity.
Analysts say the combination of declining foreign assets and rising domestic assets suggests a shift in liquidity sources, with domestic credit increasingly supporting overall monetary growth.
The marginal dip in money supply comes amid ongoing macroeconomic adjustments, as the Central Bank of Nigeria intensifies efforts to stabilise prices, manage liquidity and support the naira in the face of persistent external pressures.
Over the past year, the apex bank has maintained a tight monetary stance to curb inflation and control excess liquidity.
In September 2025, the Monetary Policy Committee of the CBN reduced the Monetary Policy Rate (MPR) by 50 basis points to 27 per cent to stimulate economic activity, before retaining the rate at the same level in November 2025 in a cautious bid to balance growth and price stability.
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Economic watchers note that while the slight decline in M3 may signal short-term liquidity constraints, it does not indicate an economic contraction. Instead, it reflects the delicate balancing act between controlling inflation, ensuring adequate liquidity and sustaining growth.
They added that continued monitoring of money supply indicators, particularly M2 and net foreign assets, will remain critical for policymakers as they navigate evolving economic conditions.
