Nigeria's Money Supply Soars by 65% to N107.1tn in August, CBN Reports

Nigeria's money supply, known as M2, surged by 65% year-on-year to reach N107.1 trillion in August 2024.

This remarkable increase was reported by the Central Bank of Nigeria (CBN) and marks a substantial rise from N64.8 trillion recorded in the same period last year.

The data, released by the CBN, also indicated a month-on-month growth of 0.75%, up from N106.3 trillion in July 2024.

Reacting to this surge, the CBN's Monetary Policy Committee convened its 297th meeting last week and decided to raise the Monetary Policy Rate (MPR) by 50 basis points, bringing it to 27.25%.

Additionally, the Cash Reserve Ratio (CRR) for Deposit Money Banks was increased by 500 basis points to 50.00%, while Merchant Banks saw a 200 basis point hike to 16%.

Despite these adjustments, CBN Governor Olayemi Cardoso announced plans to inject an additional N1.4 trillion into the financial sector to enhance liquidity.

"The rise in M2 is a clear indicator of the growing money supply within our economy," said Governor Cardoso. "However, we are taking proactive measures to ensure that this growth translates into tangible benefits for all Nigerians."

The interest rate hike has sparked concerns among business owners and industry leaders. The National Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) warned that the increased rates could potentially stifle investments. "The CBN interest rate hike will kill investments," stated a representative from NACCIMA, reflecting the apprehensions within the business community.