Money supply dropped to ₦110.3 trillion in February, marking a three-month low.
This decrease followed the Central Bank of Nigeria’s efforts to manage inflation by mopping up liquidity from the economy.
Data from the CBN showed that money supply decreased by 0.6% month-on-month, falling to ₦110.32 trillion in February 2025.
This represented a ₦622.9 billion drop from ₦110.94 trillion in January 2025.
“This reflects the impact of the various monetary tools to moderate the volume of funds in circulation as part of the initiatives to curtail inflation,” said Ayokunle Olubunmi, head of financial institution ratings at Agusto & Co.
The most recent decline in money supply occurred in October 2024, when it fell to ₦107.99 trillion, down from ₦109.41 trillion in September 2024.
Olubunmi stated that if the decline in money supply continues, it could help further reduce inflationary pressures.
The Senior Relationship Manager at FSDH Merchant Bank, Ayodele Akinwunmi, noted that the decline in money supply indicates that the CBN’s measures to curb inflation, including the mopping up of excess liquidity, are proving effective.
He said, “It will have a moderating impact on inflation.”
The Open Market Operation, a key tool used by the CBN to absorb excess liquidity from the system, increased 18-fold over the course of one year.
According to data from the CBN, the bank sold ₦11.8 trillion in OMO to banks and investors in 2024, representing a 1,773.7% increase compared to the ₦627.2 billion sold in 2023.
Meanwhile, currency in circulation fell to ₦5.04 trillion in February 2025, marking a 3.6% month-on-month decrease from ₦5.23 trillion in January 2025, the lowest level in 13 months.
