Nigeria’s money supply, known as M2, surged by 65% year-on-year, reaching N107.1 trillion in August 2024, according to the latest figures from the Central Bank of Nigeria. This marks a monthly increase of 0.75% from N106.3 trillion in July 2024.
The rise to N107.1 trillion compared to the same period last year indicates an increase of N65.3 trillion from N64.8 trillion in August 2023. In response to this uptick in M2, the Central Bank’s Monetary Policy Committee convened for its 297th meeting last week and unanimously agreed to raise the Monetary Policy Rate (MPR) by 50 basis points, bringing it to 27.25%.
This interest rate hike was followed by an increase in the Cash Reserve Ratio (CRR) for Deposit Money Banks, which surged by 500 basis points to 50.00%. Merchant Banks also saw an adjustment, with their CRR rising by 200 basis points to 16%.
Despite the increase in M2, CBN Governor Olayemi Cardoso announced plans to inject an additional N1.4 trillion into the country’s financial sector to enhance liquidity while keeping other monetary policy parameters unchanged.
