Money supply (M3) in Nigeria has reached an unprecedented N101.34 trillion as of June 2024, marking a 56.15% increase from N64.90 trillion in June 2023, according to Central Bank of Nigeria (CBN) data. This rise follows a 2.11% month-on-month increase from N99.23 trillion in May 2024.
Thank you for reading this post, don't forget to subscribe!The expansion of money supply can contribute to inflation, as more money in the economy may drive up prices for goods and services. This trend is compounded by increased government revenue amid naira depreciation and a stronger oil sector performance, noted Ayokunle Olubunmi, head of financial institutions ratings at Agusto Consulting.
Despite the CBN’s efforts to curb inflation through the issuance of over N1.5 trillion in Open Market Operation (OMO) bills under Governor Olayemi Cardoso, inflation has surged to 34.2% in June 2024, up from 22.8% the previous year.
Currency in circulation also reached a record N4.05 trillion, a 55.77% increase year-on-year. However, net credit to the government decreased by 10.18% to N28.05 trillion, while credit to the private sector grew by 38.46% to N73.12 trillion from June 2023.
