Money Supply in Nigeria has crossed N50.5 trillion, the Central Bank of Nigeria (CBN) has revealed. This comes as the financial services regulator plans to release redesigned naira notes.
The money supply had closed last year with N44.4 trillion but following a significant supply of about N6.1 trillion this year, as of October, the total figure hit N50.5 trillion, making it the highest ever to be reported by the apex bank.
The CBN data indicate that the N6.1 trillion released so far is set to surpass the N6.6 trillion reported for the calendar year of 2021.
Interestingly, an increase in money supply could have a negative or positive impact on an economy, and based on the current economy, Nigeria is closer to the former.
Increase in money supply usually follows economic recession. Hike in money supply is expected to boost economic growth, with enough capital going round for companies to grow operations and increase jobs.
READ ALSO: 5 Major Reasons Naira Won’t Recover Soon
Rise in money supply is not generally a positive sign for the economy, and considering Nigeria is not experiencing recession, but a soaring inflation, it means the money supply is already driving up cost of living.
Out of the total money in supply, liquid assets hold about N29.2 trillion, banks are holding N18.4 trillion on behalf of their customers as deposits, and N2.8 trillion is currently outside the banking system.
This revelation comes days before the central bank’s plan to release redesigned naira on December 15 and phase out the current notes by end of January next year.
Governor of the CBN, Godwin Emefiele, had stated that the move was to help recover money that is outside the banking system, and to prevent the naira from being replicated easily for illegal activities as new technologies make their way into fraudulent persons’ hands.
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