Money Supply Slows to N123.36tn In January – CBN Data

Nigeria’s broad money supply (M3) declined slightly to N123.36 trillion in January 2026, down from N124.4 trillion recorded in December 2025, reflecting a modest contraction in system liquidity at the start of the year.

The latest monetary statistics released by the Central Bank of Nigeria (CBN) showed that the decline followed intensified liquidity management operations by the apex bank aimed at tightening monetary conditions.

Broad money supply, which is a key measure of liquidity in the economy, comprises currency in circulation, demand deposits, savings deposits, time deposits and foreign currency deposits.

The marginal drop in January indicates the impact of the CBN’s ongoing liquidity sterilisation efforts. The bank has stepped up monetary tightening operations through instruments such as Open Market Operations (OMO) and Treasury bill issuances to mop up excess liquidity from the financial system.

The policy actions are part of broader efforts by the apex bank to contain inflationary pressures and stabilise the foreign exchange market.

A breakdown of the monetary aggregates showed mixed movements in the components driving liquidity within the economy.

Net foreign assets declined sharply to N29.6 trillion, reflecting a reduction in foreign currency holdings within the financial system.

In contrast, net domestic assets increased to N93.76 trillion, supported largely by continued credit expansion within the domestic economy.

Analysts at Norrenberger Research say the divergent movement between external and domestic liquidity drivers highlights the influence of domestic credit growth in sustaining overall money supply levels, even as foreign asset positions weakened.

Despite the marginal month-on-month contraction, money supply remains significantly higher on a year-on-year basis, suggesting that overall liquidity conditions in the economy are still relatively elevated.

Market observers note that developments in money supply will remain a key indicator for assessing the effectiveness of the CBN’s monetary tightening strategy and its impact on inflation, exchange rate stability and broader macroeconomic conditions.