CBN bills surge to ₦5.6 trillion in September, masking real money supply growth
Central Bank bills held by money-holding sectors exploded to ₦5.60 trillion in September 2026 from just ₦9.68 billion in August—a 57,744% jump that accounted for 74.4% of the monthly increase in broad money supply (M3). While M3 rose 5.40% to ₦146.60 trillion, the narrower M2 measure (which excludes CBN bills) grew only 1.38% to ₦141.00 trillion.
The CBN sold ₦17.51 trillion in OMO bills during September and repaid ₦10.89 trillion in maturing bills, netting a ₦6.62 trillion liquidity withdrawal. These interest-bearing instruments absorb excess cash from the financial system but don't represent fresh funds circulating in the economy.
Meanwhile, credit to government surged 19.26% (₦6.36 trillion) to ₦39.40 trillion, while private-sector credit declined 0.64% to ₦83.93 trillion. Net foreign assets dropped 13.57% to ₦30.90 trillion, down 25.83% year-on-year. Net domestic assets rose 11.97% to ₦115.70 trillion.
What this means: Headline money supply growth is misleading. The real economy saw modest monetary expansion (M2 at 1.38%) while the government borrowed aggressively and the CBN mopped up liquidity. Private sector lending is slowing despite being 15.73% higher than a year ago. Falling net foreign assets signal continued pressure on foreign reserves.
For businesses and borrowers: Tighter liquidity conditions may keep interest rates elevated. Government crowding out private credit could make business loans harder to get or more expensive. The naira remains under pressure with reserves declining.
Will the CBN sustain this aggressive liquidity management, or will pressure to support growth force a pivot?