Currency supply hits all-time high of N93.72trn in January

Nigeria’s broad money supply surged to a historic high of N93.72 trillion as of January 2024, marking a remarkable ascent, representing a staggering 76 per cent increase from the N53.14 trillion recorded in January 2023.

Moreover, compared to the preceding month of December 2023, which stood at N78.74 trillion, this represents a robust 19 per cent increase, equivalent to N14.98 trillion.

The trajectory of Nigeria’s broad money supply (M3), a pivotal gauge of economic liquidity, has been on an undeniable upward trajectory, surging at an accelerated pace in recent years.

Recent trends underscore a pronounced expansion in Nigeria’s money stock, a trend that intersects with an array of economic challenges. Foremost among these challenges are the surging inflation rates, mounting pressures on the naira’s exchange rate, and a downward trajectory in interest rates.

The uptick in the money supply portends a potential surge in inflation, posing a significant threat to the purchasing power of Nigerians. Moreover, an inflated money stock typically correlates with a decline in interest rates, particularly in environments characterised by a dearth of viable investment prospects.

This dynamic may render Nigerian investment vehicles less attractive to global investors, a matter of grave concern considering Nigeria’s imperative for sustained dollar inflows.