The Centre for the Promotion of Private Enterprise (CPPE), has disclosed that broad money, which grew by over N9 trillion, from N55.7 trillion to N64.9trillion is pressuring the naira in the foreign exchange market.
President of the centre, Dr Muda Yusuf, who made the remark in his statement titled: “The Naira Exchange Rate Conundrum,” noted that there is a curious surge in monetary expansion in the last month, adding that money supply grew by an unprecedented 15 percent in one month between May and June 2023.
Dr Yusuf said the surge in monetary growth is unprecedented and therefore advised the monetary authorities to investigate the drastic growth in the money supply and take steps to curb subsequent expansion, noting that such dramatic growth poses a significant risk to macroeconomic stability, especially in prices.
Yusuf also called on the monetary authorities to come up with a sustainable intervention framework to ensure the moderation of current volatility in the forex market.
He said the system needs to be managed in a way that would not undermine investors’ confidence. “Erosion of confidence triggers speculation and influences expectations which in turn triggers diverse responses among economic players.
