Nigeria’s monetary supply has reached N101.34 million, raising concerns about potential inflationary pressures.

Nigeria’s inflation may worsen as the country’s money supply (M3), which measures the total amount of money in an economy, reached an all-time high of N101.34 million in June 2024, according to recent data from the Central Bank of Nigeria, CBN.

The figure showed that M3 increased by 56.15 percent to N101.34 million in June 2024 from N64.90 trillion recorded in the corresponding period of June 2023.

Financial analysts have warned that when the money supply increases, it can lead to higher inflation. On a month-on-month basis, the money supply increased by 2.11 percent from N99.23 trillion in May 2024.

Despite the monetary tightening of the CBN, the increase in M3 comes as the country’s core and food inflation stood at 34.19 percent and 40.87 percent, respectively, in June 2024, while interest rates stood at 26.75 percent.

Analysts at FBNQuest commented on the M3 data, stating, “While the increase in CIC may suggest improved economic activity in nominal terms and higher consumer spending, it also highlights the risk of inflation, particularly if money supply growth exceeds real output growth.”

The National Assembly recently increased the Nigerian government’s ways and means advance threshold to 10 percent from 5 percent as of June 2024, and Nigeria’s currency in circulation (CIC) rose to N4.05 trillion from N2.60 trillion in the same period last year.