Banks’ lending to the economy fell by 1.5 per cent, Month-on-Month, MoM to N101.2 trillion in June from N102.7 trillion in May.
The Central Bank of Nigeria, CBN, disclosed this in its latest Money and Credit Statistics Data. The decline was driven by 1.6 per cent MoM fall in Credit to the Private sector as well as 1.2 per cent, MoM decline in Credit to the Government.
According to the CBN, Credit to the Government fell month-on-month, MoM, by 1.2 percent to N28.05 trillion in June from N28.4 trillion in May 2024.
According to CBN, credit to the private sector also declined MoM by 1.6 percent to N73.1 trillion in June from N74.3 trillion in May.
The decline reflects the impact of measures by the Central Bank of Nigeria, CBN to reduce money supply in order to curb rising inflation. These measures include a hike in the Monetary Policy Rate, MPR, which is the benchmark interest rate.
The CBN also jerked up the Cash Reserve Ratio, CRR of banks to 45 per cent in February from 32.5 per cent. While the interest rate hikes of the CBN has been severely criticized by the business community, analysts expect the apex bank to sustain the hikes, though at a slower pace, in the second half of the year.
