Nigeria's money supply (M3) has reached an all-time high of N101.34 trillion in June 2024, sparking concerns of worsening inflation. According to Central Bank of Nigeria (CBN) data, M3 increased by 56.15% from N64.90 trillion in June 2023, and 2.11% from N99.23 trillion in May 2024.
Financial analysts warn that excessive money supply growth can lead to higher inflation, which already stands at 34.19% (core) and 40.87% (food) in June 2024. The CBN's efforts to tighten monetary policy through Open Market Operation (OMO) bills have not yet yielded desired results.
FBNQuest analysts noted, "The increase in M3 highlights the risk of inflation, particularly if money supply growth exceeds real output growth." The development comes as the National Assembly raised the government's ways and means advance threshold to 10%, and currency in circulation (CIC) rose to N4.05 trillion in June 2024.