BREAKING: Cash provide rises to N114.2 trillion in March amid hovering inflation 

Nigeria’s broad cash provide (M3) rose to N114.22 trillion in March 2025, up by 24% year-on-year from N92.19 trillion in the identical month of 2024, in line with the most recent information from the Central Financial institution of Nigeria (CBN).

The surge in cash provide comes amid rising inflationary pressures, with headline inflation climbing to 24.23% in March.

On a month-on-month foundation, M3 rose by 3.2% from N110.71 trillion in February. This was largely pushed by a pointy enhance in internet international belongings (NFA), which jumped by 38.9% to N45.17 trillion, signalling stronger capital inflows and improved exterior liquidity.

In the meantime, internet home belongings (NDA) declined by 11.7% to N69.05 trillion, suggesting tighter liquidity on the home entrance.

International belongings up, home liquidity tightens 

• In Q1 2025, M3 grew from N111.11 trillion in January to N114.22 trillion in March, representing a 2.8% quarterly enhance. Web international belongings rose considerably in the course of the interval, from N33.19 trillion to N45.17 trillion—an N11.98 trillion acquire—possible reflecting improved international trade inflows and stronger steadiness of funds assist.
• In distinction, internet home belongings fell from N77.92 trillion to N69.05 trillion, down 11.4%, pointing to doable liquidity tightening by the CBN by open market operations or decreased authorities borrowing.
• The pattern means that Nigeria’s liquidity growth in Q1 was pushed extra by international inflows than home credit score progress, a shift that has implications for inflation and rate of interest coverage.

M2 and slim cash keep an uptrend 

• M2 cash provide—which excludes institutional investments however contains financial savings and time deposits—rose to N114.20 trillion in March, mirroring M3’s efficiency. This marks a 24.2% enhance in comparison with N91.95 trillion in March 2024.
• Slender cash (M1), which incorporates bodily foreign money and demand deposits, additionally grew to N38.55 trillion, up 19.7% year-on-year and a couple of.2% month-on-month. This continued rise in M1 indicators sturdy transactional demand and presumably elevated liquidity in consumer-facing sectors.

What it’s best to know 

The surge in cash provide coincided with a spike in inflation. Knowledge from the Nationwide Bureau of Statistics (NBS) reveals that headline inflation rose to 24.23% in March, up from 23.18% in February. This represents a 1.05 share level enhance year-on-year.

• On a month-on-month foundation, inflation rose by 3.90% in March, sharply up from 2.04% recorded in February. The sooner tempo of value will increase suggests stronger demand-side pressures and rising enter prices, particularly in meals, transport, and vitality.
• Regardless of the CBN’s implementation of a traditionally excessive Money Reserve Ratio (CRR) of fifty%—the best globally—Nigeria’s broad cash provide nonetheless maintained its progress.
• The CRR mandates that industrial banks maintain a specified share of their deposits with the CBN, successfully lowering the quantity out there for lending and funding.
• By setting the CRR at 50%, the CBN meant to withdraw substantial liquidity from the banking system to mitigate inflationary pressures.
• Nevertheless, the continued rise in M3 means that different components are contributing to the growth of the cash provide.
• With inflation accelerating and liquidity increasing, stress is mounting on the CBN to reply. The following Financial Coverage Committee (MPC) assembly is scheduled for Could 19–20, 2025, and it’s possible that the CBN might increase charges after holding them regular in February.

A fee hike could be aimed toward reining in inflation by curbing extra liquidity and managing demand. Nevertheless, tightening too aggressively might sluggish financial restoration and enhance the price of borrowing for companies and households.

The CBN faces a fragile balancing act. Broad cash provide is rising on the again of stronger international inflows, however inflation is shifting sooner than anticipated. Whereas rising NFA might assist naira stability, the declining home asset base and better client costs will possible dominate coverage discussions on the upcoming MPC assembly.