SAT MARCH 29 2025-theGBJournal| While Credit to the Private Sector (CPS) continued to grow, the pace of growth has slowed significantly due to the waning impact of currency depreciation on banks’ foreign-denominated assets, following the recent stability of the naira.
On the other hand, credit to the government surged by 35.2% y/y to N26.49 trillion (February 2024: N19.59 trillion), indicating increased government borrowings from domestic banks for deficit financing.
Overall, broad money supply (M3) grew by 19.5% y/y to N110.31 trillion, following increases across quasi (+21.5% y/y) and narrow (+15.6% y/y) money supply.
On a month-on-month basis, the CPS declined by 1.7% to N73.66 trillion in February (January: -1.4% m/m to N74.91 trillion), reflecting the impact of the CBN’s tight monetary policy.
Recall that recent the Central Bank of Nigeria (CBN) data shows that CPS rose marginally by 3.4% y/y to N73.66 trillion in February (February 2024: N71.21 trillion).
Analysts expect the shift toward monetary policy easing at the next Monetary Policy Committee (MPC) meeting in May to support growth in the CPS.
”Nonetheless, CPS growth is expected to remain subdued compared to the previous year, as the impact of currency depreciation on banks’ foreign-denominated assets continues to fade given the more stable naira exchange rate,” says analysts at Cordros Research
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