Amidst biting economic hardship across the country, Nigeria’s broad Money Supply (M2) increased by 62 percent year-on-year, YoY, to N107.2 trillion in August 2024, from N66.19 trillion in the corresponding period of 2023.
This is according to the Central Bank of Nigeria, CBN, Money and Credit Statistics data released yesterday.
According to the data, the M2 has continued to increase after a temporal decline it recorded in March 2024.
M2 is the estimate of the total money supply, including all the cash people have on hand, plus all the money deposited in checking accounts, savings accounts, others at a given time.
The data showed that Quasi Money grew by 75.2 percent YoY to N72.2 trillion from N41.2 trillion.
Narrow Money Supply (M1), also grew by 43 percent YoY to N34.9 trillion from N24.4 trillion in August 2023.
The report further showed that the increase in money supply followed positive changes in its components.
However the increase in M2 have been attributed to high government domestic borrowing from the private sector among other factors.
The report also shows that demand deposits in banks increased by 40 percent YoY to N31.08 trillion from N22.2 trillion in August 2023.
Currency outside banks increased by 77.2 percent YoY to N3.9 trillion from N2.2 trillion in August 2023.
Meanwhile, in a bid to aid cash flow within the banking system, the CBN has announced that it will distribute N1.4 trillion to banks the next three months.
Speaking on the issue of cash insufficiency in most bank’s automated teller machine (ATM), CBN governor, Olayemi Cardoso while speaking after the Monetary Policy Committee MPC meeting yesterday said the apex bank is working closely to ensure that there is sufficient cash in the system.
According to the CBN governor, banks do not have any excuse not to dispense cash.
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“Another N1.4 trillion is likely to be delivered in another three months to aid that whole process of cash within the system,” he said.
“So from our perspective, we are doing everything possible to ensure that there is sufficient cash in the system. There is no excuse for not having sufficient cash in the system.
“Now it goes to the deployment of that cash and quite frankly, we are working very, very closely, we are engaging with all the deposit money banks to ensure that they are putting these things through their ATMs, effectively dispensing cash to those that are in need.
“And whether they are in need or not, that’s the function of the deposit money banks. And at all points in time, there should be sufficient cash in their system that nobody should go there without being able to withdraw.”
By: Babajide Okeowo
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