The Central Bank of Nigeria pulled N13.41 trillion from the financial system in January 2026, almost five times the N2.77 trillion withdrawn during the same month last year, amid a drop in money supply and private sector credit.

This figure comes from the January 2026 Monetary and Credit Statistics released by the Financial Markets Dealers Association, according to Nairameteics.

The data indicate a widespread contraction in liquidity, as broad money, bank reserves, and private sector credit all fell month-on-month, underscoring the Central Bank’s aggressive tightening stance at the start of the year.

The latest data show that money supply contracted in January 2026, following an expansionary phase in December 2025 that had pushed currency in circulation higher.

The decline reflects the Central Bank’s ongoing sterilisation efforts to tighten liquidity and rein in inflationary pressures.

M3 which captures the total money supply, dropped 0.8 per cent month-on-month to N123.36 trillion in January, down from N124.41 trillion in December 2025.

Narrow Money, representing the more liquid components of the money supply, also fell to N123.35 trillion from N124.40 trillion.

Bank reserves fell 5.5 per cent to N30.26 trillion from N32.04 trillion, reflecting the direct effect of the CBN’s liquidity withdrawals.

Despite the January liquidity squeeze, the Monetary Policy Committee’s move to lower the benchmark rate from 27 per cent to 26.5 per cent on February 24 indicates that the peak of monetary tightening may now be behind us.

A closer look at monetary aggregates shows contrasting trends between foreign and domestic assets in the banking system.

While foreign assets fell sharply, domestic assets continued to rise, buoyed by expanding domestic credit.

Net Foreign Assets dropped 6.0 per cent to N29.61 trillion in January from N31.51 trillion in December 2025.

Net Domestic Assets increased 0.9% to N93.76 trillion, up from N92.90 trillion in December.

Over six months, NFA saw a steep decline from N41.66 trillion in September 2025 to N29.61 trillion in January 2026.

The report also indicated that Currency Outside Banks fell 3.7 per cent to N5.21 trillion from N5.41 trillion, while overall currency in circulation remained largely stable at N5.73 trillion, highlighting tighter interbank liquidity conditions in January.

For most of 2025, the CBN pursued an aggressive monetary tightening stance, using Open Market Operations and Treasury Bill issuances to mop up excess liquidity.