According to data gathered from the Central Bank of Nigeria, the banking sector credit to private sector increased year-on-year to N17.394trn at the end of August 2014, compared to the N17.252trn it was at the end of July 2014.
Also, the broad money supply (M2), which generally is made up of demand deposits at commercial banks and monies held in easily accessible accounts, increased by 2.94% in August 2014, compared with the 4.83% growth recorded in July.
It was also noted that the annualised growth of 4.41% in August 2014 was below the growth benchmark of 14.52% for the year.
The data showed that the net domestic credit increased by 5.31% in August, relative to the end of December 2013 level.
Compared to the growth benchmark of 28.5% for 2014, the annualised net domestic credit also rose by 7.96%. The CBN also explained that the slow expansion in money supply in August reflected the 10.17% contraction in net foreign assets (NFA) of the banking system.
The apex bank also stated that in all segments of the foreign exchange market, the average naira exchange rate remained considerably stable in August.
It added that though the exchange rate depreciated at the interbank and substantially at the bureau de change (BDC) segments between July and August 29, 2014, it was stable at the Retail Dutch Auction System Segment (RDAS) at N157.29 to dollar.
“At the interbank segment, the naira depreciated slightly by 32kobo or 0.20% to N167 to a dollar from N162.08 to a dollar.
“Similarly, at the BDC segment, the exchange rate depreciated by N2 or 1.2% from N167 to a dollar, to N169 to a dollar.
“The premium between the RDAS and interbank rates was 3.25% while that between the RDAS and BDC rate stood at 7.45% in the review period.
“Gross official reserves rose from $39.1bn at end-July to $40.7bn on September 17, 2014. The current level of external reserves provides approximately seven months of imports cover.’’ The CBN stated in its latest Monetary Policy Committee (MPC) communiqué. Furthermore, the central bank revealed that money market interest rates remained within the monetary policy rate (MPR) corridor.