In September 2026, the Central Bank of Nigeria (CBN) reported an extraordinary increase in CBN bills, which soared to N5.60 trillion from just N9.68 billion in August. This dramatic rise accounted for 74.4% of the total monthly increase in Nigeria's broad money supply, pushing the M3 measure up by N7.51 trillion to N146.60 trillion.
This surge in CBN bills is significant as it reflects the CBN's ongoing efforts to manage liquidity within the financial system. The increase is largely attributed to the apex bank's Open Market Operations (OMO), where it sold approximately N17.51 trillion in OMO bills while repaying about N10.89 trillion in maturing bills. This strategy resulted in a net liquidity withdrawal of around N6.62 trillion, illustrating the CBN's proactive approach to controlling excess liquidity and stabilizing the economy.
The implications of this development are profound. While the broad money supply appears to be growing, the sharp rise in CBN bills suggests that actual funds available for transactions and credit creation may not be as robust as the figures indicate. The narrower M2 measure, which excludes CBN bills, only saw a modest increase of 1.38%, highlighting a potential disconnect between monetary expansion and real economic activity. Investors and analysts should closely monitor how this liquidity management strategy impacts inflation, interest rates, and overall economic growth in Nigeria. Additionally, as the CBN continues to navigate these complexities, the ripple effects could influence investor sentiment and trading patterns across African and global markets.