Nigeria’s money supply falls to N107.66 trillion, second decline in 2024 

This is according to an analysis of the money and credit statistics of the Central Bank of Nigeria (CBN).

Naijaonpoint observed that this is the second decline recorded in 2024, as the government’s tightening fiscal measures continue to impact liquidity in the economy.

Despite the decline, M3 showed a robust year-on-year (YoY) growth of 45.7% compared to N73.91 trillion in October 2023.

Money supply trends in 2024 have been characterized by sharp fluctuations, influenced by fiscal tightening aimed at curbing inflationary pressures and stabilizing the economy.

M3 peaked at N109.41 trillion in September 2024 before declining in October, while the most significant contraction occurred in March 2024, when M3 dropped to N92.34 trillion.

Despite these contractions, YoY growth in monetary aggregates remains strong, particularly following the rebound from currency shortages in 2023.

Narrow money (M1), which comprises the most liquid forms of money such as currency in circulation and demand deposits, dropped by 3.4% MoM to N34.65 trillion in October 2024 from N35.86 trillion in September 2024.

Year-on-year, M2 grew by 48.2% from N72.66 trillion in October 2023, indicating that higher deposit levels in the banking system have offset some of the liquidity pressures caused by fiscal restraint.

In contrast to the overall decline in money supply, currency in circulation and currency outside banks recorded slight increases in October 2024.