SAT, MAY. 13 2023-theGBJournal |According to the Central Bank of Nigeria (CBN), Credit to the Private Sector (CPS) increased by 18.1% y/y to N43.07 trillion in March (March 2022: N36.47 trillion).
For the review month, we highlight that the increase in CPS reflects the impact of improved domestic macroeconomic conditions and CBN-led interventions on the real sector.
On a month-on-month basis, the CPS increased by 3.1% in March (February 2023: -0.5% m/m). In addition, the currency in circulation increased to N1.68 trillion in March; a 48.1% y/y decline, highlighting the effects of the CBN’s currency redesign.
This policy resulted in a temporary reduction in the amount of money in circulation as people were required to exchange their old banknotes for new ones.
We expect that the improvement of domestic economic activities will drive the willingness of commercial banks to create risky assets.
Also, we expect the CBN to maintain its intervention programs at a steady pace as the economy expands.
”Conclusively, we predict that the Credit to Private Sector (CPS) will maintain a double-digit expansion in 2023FY,” Cordros Research said in their review of CBN’s interventions on real sector.
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