Modupe Gbadeyanka
By Modupe Gbadeyanka
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has disclosed that in the month of April 2017, money supply (M2) contracted by 8.48 percent, annualized to a contraction of 25.44 percent in contrast to the provisional growth benchmark of 10.29 percent for 2017.
Coming out from its quarterly meeting held on Monday and Tuesday, the committee also pointed out that money market interest rates moved in tandem with the level of liquidity in the banking system.
It noted that rates were relatively stable during the review period, explaining that the interbank call rate opened at 11.40 percent on March 22, 2017 and closed at 38.94 percent on May 18.
The committee disclosed that the movement in net liquidity position was influenced by sales at the Open Market Operations, foreign exchange interventions, the payment of statutory revenues to States and Local Governments as well as maturing CBN Bills.
Furthermore, the committee said in April 2017, the Net Domestic Credit (NDC) grew by 1.40 percent, annualized to 4.21 percent, which is significantly below the 17.93 percent provisional growth benchmark for 2017.
However, it said the net credit to government grew by 24.08 percent over end-December 2016, representing an annualized growth of 72.0 percent.
The committee expressed concerned that credit to government continued to outpace the programmed target of 33.12 percent for fiscal 2017, while credit to the private sector declined considerably far below the programmed target of 14.88 percent.
