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Nigeria’s money supply hits historic N95.56 trillion in Feb 2024 despite MPC’s tightening stance 

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Nigeria’s broad money supply (M3) has surged to a new historic high of N95.56 trillion as of February 2024 despite the hawkish tightening stance of the Monetary Policy Committee (MPC). 

This figure represents a staggering 79.29% surge from the N53.3 trillion recorded in February 2023, showcasing a substantial year-on-year growth of N42.26 trillion. 

Moreover, compared to the preceding month of January 2024, which stood at N93.72 trillion, this represents a 1.96% increase, equivalent to N1.84 trillion. The Central Bank of Nigeria (CBN) revealed this data in its latest money and credit statistics.  

Nigeria’s Money Supply (M2) also hit historical high of N93.9 trillion in February from a record N92.8 trillion established in January 2024

The trajectory of Nigeria’s broad money supply (M3), a pivotal gauge of economic liquidity, has been on an undeniable upward trajectory, surging at an accelerated pace in recent years.

Ms. Emem Usoro, Deputy Governor, Operations Directorate, in her personal statement at the previous MPC meeting in January 2024 noted that: 

She also said that inflationary pressures may persist in the near term partly due to a number of factors, such as the lingering impact of PMS adjustments, import costs, exchange rate passthrough, and growth in money supply. 

The uptick in the money supply portends a potential surge in inflation, posing a significant threat to the purchasing power of Nigerians.

While there has been a significant surge in the money supply, the country’s economic growth has been tepid, with Nigeria’s economic growth rate for 2024 projected to be around 2.9% and 3.1%, having one of the slowest growth rates in West Africa.

At the CBN’s first Monetary Policy Committee (MPC) meeting for 2024, the monetary policy rate (MPR) was increased  by 400 basis points, elevating it to a historic high of 22.75% to combat inflation and foster economic stability.

The decision has garnered praise from the International Monetary Fund (IMF), which commended the MPC’s resolve to tighten monetary policy further by increasing the policy rate to 22.75%.

The second MPC meeting under Cardoso is ongoing, and it is expected that the implications of this expanded money supply on their deliberations, particularly regarding the MPR, are poised to take centre stage. 

 

 

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