CBN Explains as Currency in Circulation in Nigeria Hits N64.3 Trillion in One Month
- According to data from the Central Bank of Nigeria, currency in circulation has surpassed N64 trillion in one month
- The amount spiked from N55.5 trillion in May, addition of N8.8 trillion as the country battles inflation
- The development is a precursor to inflation, according to economic analysts who advised that CBN mop up more money
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The Central Bank of Nigeria has revealed that the money supply in Nigeria spiked to N64.3 trillion in June 2023, the highest ever recorded in Nigeria.
The amount contrasts with the N55.5 trillion recorded in May, a massive N8.8 trillion increase.
Source: Getty Images
Current amount may drive up inflation
The Data is from the Central Bank of Nigeria, which revealed development in its credit statistics.
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Money supply refers to the total amount available in an economy at a particular time.
The amount includes physical currency, such as coins and banknotes, and various deposits held by individuals, businesses, and institutions in banks.
It is also essential for assessing interest rates and inflation in a given period.
The current increase in money supply comes amid reports of rising inflation in Nigeria which the National Bureau of Statistics said now stands at 22.79%.
Analysts expressed concerns that with the current amount of money in circulation, inflation may hit 23% for July.
Investment banker and financial analyst Maureen Adeyemi told Legit.ng that the situation is not looking very pretty for the economy as there is so much money chasing fewer goods.
Analysts asks CBN to mop up more money
“The situation is not good at all. The development is a harbinger of inflation. The money there is in a system, it is more likely to breed inflation,” Maureen said.
She asked that the apex bank mop up more money to stabilise the price of goods and services in the country.
“With the current inflation rate, Nigeria cannot afford to risk it exceeding its current rate,” she said:
CBN mops Up N2.09 trillion in 4 months as cash scarcity persists
Legit.ng reported that the Central Bank of Nigeria (CBN) has shrunk the currency in circulation from N3.29 trillion as of October 2022 to N1.38 trillion by January 2023 as it embarks on the demonetisation policy with the naira redesign policy.
According to data obtained from the apex bank, this represents a drop of N1.91 trillion in three months.
The move is due to the naira redesign plans of the CBN announced by Godwin Emefiele in October last year.
Source: Legit.ng
