The Central Bank of Nigeria (CBN) withdrew N13.41 trillion from the financial system in January 2026.
The amount is nearly five times higher than the N2.77 trillion mopped up in the same period last year.
According to the Monetary and Credit Statistics for January 2026, published by the Financial Markets Dealers Association (FMDA), there was a broad-based contraction in liquidity, with broad money (M3), bank reserves, and private credit all recording month-on-month declines, reflecting an aggressive tightening stance by the apex bank at the start of the year.
The latest figures indicate that money supply declined in January 2026 following an expansionary cycle in December 2025 that saw currency in circulation spike. The contraction underscores the apex bank’s sterilisation drive aimed at tightening liquidity and curbing inflationary pressures.
Broad Money (M3), which measures total money supply in the economy, fell by 0.8% month-on-month to N123.36 trillion in January from N124.41 trillion in December 2025.
Narrow Money (M2), representing more liquid forms of money that can be easily accessed and spent, also declined to N123.35 trillion from N124.40 trillion.
Private sector credit moderated by 0.8% to N75.24 trillion in January, down from N75.83 trillion in December 2025, while credit to government edged lower by 0.1% to N34.19 trillion from N34.22 trillion.
Bank reserves dropped by 5.5% to N30.26 trillion from N32.04 trillion, reflecting the direct impact of the liquidity mop-ups.
Despite the January squeeze, the Monetary Policy Committee’s decision to reduce the benchmark rate from 27% to 26.5% on February 24 suggests the peak of monetary tightening may have been reached.
