The Central Bank of Nigeria (CBN) has reported a surge in the nation’s money supply, which reached a new high of N99.24 trillion in May 2024.
This marks a 2% increase from the previous month’s figure of N96.97 trillion and a remarkable year-on-year growth of 78% from N55.69 trillion in May 2023.
The increase was even more pronounced on an annual basis, with a 78% rise from N55.69 trillion in May 2023.
The growth is due to stringent measures by the Monetary Policy Committee (MPC) aimed at curbing inflation.
Aside from March 2024, M3 has been on a steady rise, defying CBN’s tightening monetary policy efforts
The MPC has implemented various policies to control the rising inflation, including adjustments in the interest rates and other monetary tools.
However, the rapid increase in the money supply suggests that the measures have yet to achieve their desired effect on controlling the liquidity in the economy.
Experts say the surge in money supply could further fuel inflationary pressures, as more money in circulation might lead to higher demand for goods and services, potentially driving up prices.
While an increased money supply can indicate economic expansion, if not managed properly, it can also lead to overheating and destabilization.
