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Money supply rises 36% to N67trn


Broad Money supply (M3) increased Year-on-Year (YoY) by 36 percent to N67 trillion as at September 2023 (9M’23) from N49.3 trillion as at September 2022, 9M’22.

The Central Bank of Nigeria, CBN, disclosed this in its third quarter 2023, Q3’23, Economic Report.

The currency-in-circulation moved by 64.3 % to as at September 2023 from N1.68 trillion in March 2023 following the Supreme Court order that the old N200, N500 and N1,000 old notes to remain legal tender, slowing down  the Godwin Emefiele’ led CBN’s administration aim of redesigning the naira which include, among other things, to mop up excess cash in the country’s economy.

An increase in the supply of money typically lowers interest rates, which in turn, generates more investments and puts more money in the hands of consumers, thereby stimulating spending.

According to the apex bank, efficiencies in financial intermediation also led to a 3.4 percent increase in broad money multiplier during the period from 3.3 percent in December 2022. CBN noted that on the asset side, domestic claims were the sole driver of growth in M3 with a contribution of 51 percentage points in the review period.

The regulator said: “Efficiencies in financial intermediation led to an increase in broad money multiplier to 3.4 from 3.3 in December 2022.

“Consequently, the broad money supply (M3) rose by 28.8 per cent to N67.18 trillion, compared with its level at end-December 2022.

“On annualised basis, M3 grew by 38.4 per cent or 10.2 percentage points above the programme target, partly on account of the bank’s effort to encourage lending to the private sector.

“On the asset side, domestic claims, which grew by 40.2 per cent, was the sole driver of the growth in M3 contributing 51.0 percentage points to that growth.

“Domestic claims grew on account of the 44.1 and 38.1 per cent increases in net claims on central government and claims on other sectors, respectively.

“Net claims on central government rose due to increased holdings of government securities and loans granted by depository corporations.

“The growth in claims on other sectors was driven by a 62.0, 41.3, 31.6 and 9.0 per cent increases in claims on public non-financial corporations, claims on private sector, claims on other financial corporations, and claims on state and local government, respectively.

“Overall, Net Domestic Asset (NDA) grew by 37.8 per cent and contributed 35.0 percentage points to the growth of M3, while Net Foreign Assets (NFA) fell by 84.6 per cent, moderating the growth by negative 6.2 percentage points.”

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