CBN: Credit To Economy Up 2.3% To N92.8trn In April

…currency in circulation hits N3.92trn

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After falling sharply to N90.80 trillion in March, financial institutions’ credit to the economy (government and private sector) rose by 2.30 per cent (N2.09 trillion) to N92.89 trillion in April 2024, the Central Bank of Nigeria (CBN) has said.

According to the latest Money and Credit Statistics posted on the apex bank’s website on Monday, net credit to government increased to N19.98 trillion in April compared to N19.59 trillion and N33.93 trillion in March and February 2024 respectively.

Similarly, credit to the private sector rose to N72.92 trillion in April compared to N71.21 trillion in March and N80.86 trillion in February.

Analysts note that Private Sector Credit Extension (PSCE) continues to head north despite CBN’s restrictive measures. In a recent report, FBNQuest Research stated: “Credit extension to the private sector and other monetary aggregates have continued to expand despite the CBN’s implementation of various restrictive measures, including the return of Open Market Operation (OMO) auctions, Cash Reserve Requirement (CRR) debits, removal of the N2.0 bn cap on Standing Deposit Facility for DMBs, and adjustment of the asymmetric corridor of the MPR to (+100/-300 bps) from (+100/-700bps previously).”

Further analysis of the data showed that Currency in Circulation (CIC) rose by N53.62 billion or 1.39 per cent to N3.92 trillion in April 2024 compared to N3.87 trillion in March. However, Currency Outside Banks (COB) fell by 0.62 per cent to N3.61 trillion in April 2024 compared to N3.63 trillion in March.

Analysts noted that by further rising to N3.92 trillion in April currency in circulation appears to have resumed its upward trend, after falling slightly to N3.650 trillion in January from N3.653 trillion in December.

This means that currency in circulation is approaching high levels which made the CBN to introduce its naira redesign policy in October, 2022 in its bid to fight inflation and ensure naira stability.

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