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Amid CBN’s tightening measures, money supply surged to N96.97trn in April

Nigeria’s money supply (M3) surged to a new peak of N96.97 trillion in April 2024, reflecting a significant recovery from the previous decline recorded in March.

This growth comes in the face of the Monetary Policy Committee’s (MPC) stringent measures aimed at controlling inflation.

The latest money and credit statistics data from the Central Bank of Nigeria (CBN) reveals a month-on-month (M-o-M) increase of 5 per cent from N92.34 trillion the previous month and a year-on-year (Y-o-Y) growth of 73 per cent from N56.05 trillion in the same month of the previous year.

Aside from March 2024 when there was a marginal M-o-M decline of 3 per cent from a record N93.9 trillion in February, M3 has been on a steady rise, defying CBN’s tightening monetary policy efforts.

The figure recorded in April exceeded the previous high recorded in February before the slight decline in March.

M3 encompasses both net foreign assets and net domestic assets, painting a holistic picture of the nation’s monetary dynamics.
It is also M1 plus CBN bills, while M2 represents currency outside banks plus demand deposits and quasi-money (investments).

Despite the MPC’s tightening stance, which typically aims to curb excess liquidity in the economy to control inflation, the money supply has shown resilience.
The consistent increase in M3 suggests underlying factors driving liquidity growth, potentially including government spending.

During the MPC meeting held in March this year, Olayemi Cardoso, Governor of the CBN, said that government purchases of palliatives are a contributing factor to rising food prices in Nigeria. (Source: nairametrics)

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