Currency outside Banks rises 10.2% as money supply expands

Nigeria’s broad money supply (M²) rose by 1.2 per cent month-on-month to N124.4 trillion in December 2025, up from N122.9 trillion recorded in November, according to the Central Bank of Nigeria (CBN).

The figures are contained in the CBN’s Money and Credit Statistics released over the weekend.

An analysis of the data showed that most components of money supply recorded increases during the period, with the exception of quasi-money, which declined slightly.

Narrow money (M¹) grew by 4.05 per cent to N42.14 trillion in December, compared with N40.5 trillion in the previous month.

Similarly, demand deposits increased by 3.08 per cent month-on-month to N36.7 trillion, up from N35.6 trillion in November.

Currency Outside Banks (COB) also recorded a sharp rise, growing by 10.2 per cent to N5.4 trillion in December, from N4.9 trillion in November.

In contrast, quasi-money declined marginally by 0.18 per cent to N82.25 trillion, compared with N82.4 trillion in the preceding month.

The expansion in money supply was largely driven by increased lending to both the government and the private sector.

Data from the CBN showed that credit to the government surged by 29.5 per cent month-on-month to N34.2 trillion in December, from N26.35 trillion in November.

Similarly, credit to the private sector rose by 1.6 per cent to N75.8 trillion, compared with N74.6 trillion in the previous month.

As a result, net domestic credit expanded by 13.9 per cent month-on-month, rising to N115.06 trillion in December from N100.98 trillion in November.

The increase in money supply was also reflected in currency in circulation, which rose by 9.6 per cent to N5.7 trillion in December 2025, up from N5.2 trillion in November.

Analysts note that the rise suggests increased cash usage in the economy, despite the continued adoption of electronic payment systems, expansionary monetary policy stance, and growth in Nigeria’s Gross Domestic Product (GDP).