Nigeria’s Money Supply Declines Again in June 2025

The Central Bank of Nigeria (CBN) recently shared new data showing that Nigeria’s total money supply (that’s all the money circulating in the economy) dropped again in June 2025 — marking the third monthly decline this year.

In simple terms, the total money in the economy fell slightly from ₦119 trillion in May to ₦117.4 trillion in June, a 1.27% drop. The first dip happened earlier in February, and since then, we’ve seen a few more declines — a sign that there’s less cash flowing around in the system.

Even though June’s figure is lower than May’s, money supply is still up 15.8% compared to last year, rising from ₦101.4 trillion in June 2024. So, there’s still more money in the economy than a year ago — just not as much as a few months back.

Looking deeper:

• Foreign assets (Nigeria’s external money holdings) fell from ₦45.8 trillion in May to ₦40.7 trillion in June, showing that our international financial position weakened slightly.
• Domestic assets (money held within the country), on the other hand, increased from ₦73.2 trillion to ₦76.8 trillion, helping to balance things out a bit.

Overall, this means liquidity (available money) in the economy is tightening. The CBN’s data also shows:

• M2 money supply (a broad measure including savings and time deposits) fell from ₦118.9 trillion to ₦117.4 trillion.
• M1 money supply (cash and checking accounts) dropped slightly from ₦40.4 trillion to ₦39.9 trillion.

Simply put, there’s less cash in circulation, which could be due to higher interest rates, reduced government spending, or seasonal changes in how money moves through the economy.

Equities Market Update

Nigerian Stocks Close the Week Higher

The Nigerian stock market ended the week on a positive note, as the ASI gained 1.02% w/w to close at 143,584.04 points; meanwhile, total market capitalization climbed to ₦91.14 trillion.

That means overall, investors made gains this week. However, trading activity slowed a bit as investors exchanged 2.95 billion shares worth ₦90.44 billion, slightly less than last week’s 2.99 billion shares worth ₦93.95 billion.

Sectoral Performances

• Oil & Gas led the way this week, gaining +5.68%, thanks to strong demand for ETERNA (+32.8%) and ARADEL (+16.1%) shares.
• Industrial Goods followed with a +1.66% rise, supported by Dangote Cement (+0.98%), though Julius Berger dropped -17.79%, which reduced overall gains.
• Banking stocks were also up +1.17%, as investors bought into Fidelity Bank (+11.11%) and GTCO (+3.06%), among others.
• Consumer Goods inched up +0.13%, boosted by buying interest in PZ Cussons (+20.87%) and UACN (+10.00%).
• The only loser this week was the Insurance sector, which fell -2.02%, dragged down by Mansard (-10.00%) and Sovereign Insurance (-9.54%).

The market finished strong this week, with most sectors closing in the up w/w. While the overall trend is positive, a closer look shows that investors are being selective. They are confidently piling into certain fundamentally sound names, showing there's real belief in the market's strength.

Fixed Income Market Update

There was more money in the banking system this week, as overall liquidity rose from ₦4.02 trillion last week to ₦5.73 trillion by Friday. Liquidity even peaked at ₦6.57 trillion on Tuesday, helped by a ₦731 billion OMO maturity (that’s money released back into the system when older CBN bills expired).

Despite a small drop later in the week, system liquidity stayed strong, while short-term interbank lending rates (what banks charge each other to borrow money) were mostly stable. The Overnight Policy Rate (OPR) stayed around 24.50%, and the Overnight Rate ended slightly higher at 24.89%.

OMO Auction Highlights

The CBN held an OMO auction (a way the CBN manages liquidity) on Friday, offering ₦600 billion worth of bills across 3 short-term tenors (88, 102, and 123 days).

Investors showed strong interest, subscribing a total of ₦3.32 trillion, mostly for the longer 123-day bills.

But the CBN only sold ₦98 billion overall — ₦70 billion of the 102-day bill at 20.49%, and ₦28 billion of the 123-day bill at 20.61%.

No bills were sold for the shortest (88-day) tenor. This suggests that while investors are hungry for CBN paper, the bank is being selective about how much liquidity it wants to mop up from the market.

Yields Ease Across Most Tenors

Yields (returns investors earn on fixed income instruments) declined across most maturities this week:

• T-bills: 6-month and 1-year bills fell slightly to 17.89% and 18.48%.
• Bonds: 2-year and 10-year bonds also dropped to 16.73% and 16.21%.

The only outlier was the 20-year bond, which rose sharply to 15.99% — suggesting investors want higher returns for longer-term commitments.

Liquidity in the system improved this week, with short-term rates remaining stable and yields mostly dipping, indicating a slightly more relaxed fixed-income market, despite the CBN maintaining tight control through selective OMO sales.

Market Outlook for the Coming Week

Equities (Stocks)

The stock market ended this week on a positive note, with all sectors closing higher. But if you look closer, investors are being very selective — they’re not just buying everything, they’re focusing on specific opportunities they believe will perform well.

This shows that confidence is returning to the market, but investors are still being careful and strategic. In short, the market mood is optimistic but cautious.

Fixed Income (Bonds & T-bills)

We expect system liquidity to remain robust throughout the week funding rates to remain around 24.50%. We expect sustained bullish sentiments across the fixed income space, and mostly in the NTB and OMO markets, supported by the ample liquidity position. We also expect the release of the NTB auction calendar for Q4 which will influence market activity across the fixed income market.

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