As the value of the Naira continues to tumble in both the official market and the parallel black market (see today’s Naira Dollar exchange rates below), the central Bank of Nigeria has reportedly increased the supply of money in circulation by a whooping 16.3% in one month.
According to Seun Osawa, the founder of Nairaland, “the Central Bank of Nigeria printed an alarming quantity of money electronically in June 2022.
“They increased the supply of narrow money aka M1 – which includes cash and money in bank accounts that can be spent immediately, from ₦22.47 trillion to ₦24.49 trillion, which means they printed ₦2.03 trillion, increasing the narrow money supply by a whopping 9.03% in one month – June.
“They increased the supply of broad money M3, which includes all money in the country, from ₦55.8 trillion to ₦64.9 trillion, which means they printed ₦9.1 trillion naira, increasing broad money supply by 16.31%, in one month. In other words, what they printed in June is 16.31% of all the money that the CBN had printed since independence.
What does this mean? According to the CBN itself, “there is excess money supply when the amount of money in circulation is higher than the level of total output of the economy. When money supply exceeds the level the economy can efficiently absorb, it dislodges the stability of the price system, leading to inflation or higher prices of goods.”
It also impacts the exchange rate; when more of a currency is printed, each unit of the currency becomes less valuable.
A source I spoke to said that he suspects that the government has borrowed more money from the CBN. Trillions of naira. Inflation is 📈, naira is 📉.
Meanwhile, below is the Naira exchange rates to major currencies (Dollar, Euro and Pounds) in the black (parallel) markets in Lagos, Abuja and Kano today Tuesday, July 18, 2023.
Dollars to Naira (USD to NGN) Exchange Rate Today
Buying Rate 830
Selling Rate 825
Euro to Naira (EUR to NGN) Exchange Rate Today
Buying Rate 912
Selling Rate 893
Pounds to Naira (GBP to NGN) Exchange Rate Today
Buying Rate 1115
Selling Rate 1090