Financial News Highlights May 29, 2024 – Money Supply Hits Record High Despite Squeeze etc

 

Money supply hits record high of N96.96trn in one year despite liquidity squeeze

 

Money supply (M2), a monetary tool used by the Central Banks to measure currency supply in an economy, in April 2024, hit a record high of N96.96 trillion in one year despite monetary tightening by the Central Bank of Nigeria (CBN).

 

The M2 declined by 1.75 percent to N92.33 trillion in March 2024 from N93.97 trillion in February of the same year.

 

Data from the CBN showed that M2 rose significantly by 74.26 percent in one year to N96.96 trillion in April 2024 from N55.64 trillion in April 2023. On a month-on-month basis, money supply grew by 5.01 percent from N92.33 trillion in March 2024.

Money Supply (M2) Definition

M2 is a broad category that encompasses all the cash people have on hand, plus the money deposited in checking accounts, savings accounts, and other short-term savings vehicles like certificates of deposit (CDs). Retirement account balances and time deposits above a certain amount are typically not included in M2.

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Economists use M2 to track how much money is flowing through an economy. This can be important because it can influence things like inflation and interest rates. For example, if the money supply grows too quickly, it can lead to inflation as there’s more money chasing after a limited number of goods and services.

 

M2 is a broader measure of the money supply than M1, which only includes currency in circulation, checking account deposits, and traveler’s checks. M2 gives a more complete picture of how much money is readily available to be spent in the economy.

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The CBN has issued over N1.5 trillion in Open Market Operation (OMO) bills since Olayemi Cardoso took the helm as governor in a bid to stem inflation and prop up the naira, whose steep decline has unsettled the economy.

 

currency in circulation up 65.40%

The data also revealed that currency in circulation increased by 65.40 percent in one year to N3.92 trillion in April 2024 compared to N2.37 trillion in April 2023. On a monthly basis, currency in circulation went up by 1.29 percent from N3.87 trillion in March 2024.

 

Currency outside (COB) banks jumped to N3.60 trillion in April 2024, representing a 73.91 percent increase over the level of N2.07 trillion recorded in the corresponding period of 2023. The COB declined by 0.83 percent month-on-month from N3.63 trillion in March 2024.

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Also, the data showed that credit to the government and to the private sector rose in April 2024 after dropping in the previous month.

 

 

Credit to the government increased by 1.94 percent to N19.97 trillion in April 2024 compared to N19.59 trillion recorded in March of the same year.

 

Credit to the private sector increased to N7.92 trillion in April 2024, rising by 2.40 percent from N71.21 trillion in March 2024, the CBN data indicated.

 

 

Other Major Financial News Headlines today May 29, 2024:

 

NAHCO targets N100bn in five years

Foundation, UNILAG empower three innovators with N3.5m

Rising interest rates stifling business growth ‘ Experts

For more details on the above Highlights and others simply get a printed copy of business day newspaper or visit their website

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