By Elizabeth Adegbesan

The Central Bank of Nigeria (CBN) has revealed a significant expansion in the country’s financial system, with credit to the private sector rising by 2.8 percent month-on-month to N83.3 trillion in June 2026, up from the N81 trillion recorded in May 2026.

However, the apex bank disclosed that credit to the government dipped marginally by 0.99 percent to N40 trillion in June 2026 from N40.4 trillion in May.

This minor contraction occurred despite the Federal Government’s continuous borrowing activities aimed at financing its N23.85 trillion budget deficit.

According to the CBN’s latest Money and Credit Statistics data, these shifting dynamics culminated in a 1.5 percent increase in net domestic credit, which climbed to N123.3 trillion in June 2026 from N121.42 trillion the previous month.

This domestic credit expansion directly fueled the country’s broad money supply (M²), which grew by 3.09 percent month-on-month to N133.2 trillion in June 2026, up from N129.2 trillion in May.

The upward trajectory was largely driven by a robust eight percent surge in Quasi money, which rose to N88.5 trillion in June from N84.6 trillion in May. Other money supply components saw marginal gains.

Narrow money inched up by 0.22 percent to N44.7 trillion in June from N44.6 trillion in May, while demand deposits experienced a 1.02 percent bump to settle at N39.8 trillion in June from N39.4 trillion the previous month.

In contrast, currency circulating outside the banking system fell by 5.7 percent, dropping to N4.9 trillion in June from N5.2 trillion in May. This decline indicates an increased formalization of transactions as more liquidity flows back into the banking environment.

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