Money Supply Rises To Record High Of N49 Trillion, Despite CBN Interest Rate Hikes
Money Supply Rises To Record High Of N49 Trillion, Despite CBN Interest Rate Hikes
With about N49.3 trillion in the economy in August, the money supply surpassed the previous record set in May 2022 to reach its highest level on record.
ALSO, READ Allianz Sees Improved P&C Performance In H1 2022 As Operating Profit Rises
Since December 20, 2021, when the country recorded N44.4 trillion, the money supply has increased by 9.9%. This is based on data about the nation’s money supply that Nairametrics obtained from the Central Bank of Nigeria (CBN).
The central bank indicated the increase in the money supply was caused by a rise in net domestic assets at its most recent monetary policy committee meeting.
“The Committee noted that broad money supply (M3) grew by 11.05 percent in August 2022, compared with 8.66 percent in July. This was driven largely by the growth in Net Domestic Assets (NDA) of 26.19 percent in July 2022, compared with 22.78 percent in the preceding month.
Money Supply Rises To Record High Of N49 Trillion, Despite CBN Interest Rate Hikes
The sustained growth in Net Domestic Assets (NDA) was driven largely by increased claims on the Federal government and other financial corporations and the private sector.”
Considering the multiple interest rate hikes implemented since July is intended to combat inflation and lower the amount of money in circulation, this increase in the money supply is concerning.
ALSO, READ Allstate ‘Further Accelerating’ Rate Hikes Following Q2 Loss
The CBN also mentioned that the recent rate hike could help slow down the pace of money supply, though Nairametrics believes this will take some time to occur effectively.
“The MPC noted that a tight policy stance would help consolidate the impact of the last two policy rate hikes, which is already reflected in the slowing growth rate of money supply in the economy.”
AllInsuranceHUB is a blog for everyone who seeks an informative, educative, and knowledge-based online insurance and investment community. We share Biographies, Top-notch investment tips, finance news, insurance policy details and much more. You can read and share thoughts, ideas, and opinions on the finance market and get real-time updates from around the globe.
