Nigeria’s Apex bank, Central Bank of Nigeria (CBN) has disclosed that the country’s money supply (M2) is now at a record high of N50.5 trillion as of October 2022.
The amount of money supply in the country has risen by N6.1 trillion this year alone having closed at N44.4 trillion at the end of 2021. The increase is on track to beat the N6.6 trillion achieved in the whole of 2021.
Experts say while this is the highest level ever reported for one of the most important monetary-related statistics tracked by Nigeria’s central bank or any central bank in the world, increase in money supply was N1.26 trillion in October alone, marks third highest month after April and May this year.
Experts also say this matters because an increase in the level of money supply in an economy is meant to deliver two major actions apart from it can help spur economic growth in the country as an increase in the supply of money in a depressed economy or one experiencing recession is often seen as a remedy as well as tracking excessive money supply growth that triggers galloping inflation in any country forcing a reversal of strategy.
The amount of money in supply has accumulated over the years largely due to the low-interest policy of the CBN (adopted to spur economic growth), trillions of naira in CBN intervention funds, and CBN bailouts of federal and state governments via its Ways and Means powers. The result is too much naira chasing dollars.