Five Things CBN Hopes To Achieve Between 2019 And 2024 – Emefiele

CBN Reviews Capitalisation Of Tier 2 Microfinance Banks

 

Governor of the Central Bank of Nigeria, Godwin Emefiele, has listed five things that the apex bank hopes to achieve over the next five years.

He stated the five things while presenting the Monetary Policy roadmap for his 2019-2024 new term in office on Monday at the CBN Headquarters in Abuja.

“Our priorities at the CBN over the next 5 years are the following; First, preserve domestic macroeconomic and financial stability; Second, foster the development of a robust payments system infrastructure that will increase access to finance for all Nigerians, thereby raising the financial inclusion rate in the country,” he said.

According to him, the third thing the bank hopes to achieve is to continue to work with the Deposit Money Banks to improve access to credit for not only smallholder farmers and MSMEs but also Consumer credit and mortgage facilities for bank customers.

“Our intervention support shall also be extended to our youth population who possess entrepreneurship skills in the creative industry.

“This group deserve our encouragement. We shall also during this intervening period encourage our Deposit Money Banks to direct more focus in supporting the Education Sector,” he said.

Read Also: CBN Gov Unveils 2019-2024 Policy Direction

Fourth on his list is to grow the nation’s external reserves, and lastly, support efforts at diversifying the economy through the various intervention programs in the agriculture and manufacturing sectors.

The CBN Governor said he was confident that when implemented, the aforementioned measures will help to insulate the economy from potential shocks in the global economy.

“In my second term in office, part of my pledge is to work to the best of my abilities in fulfilling these objectives,” he said.

Emefiele was first appointed by former President Goodluck Jonathan in 2014 and was retained after Buhari assumed office in 2015.

On May 8, President Muhmmdu Buhari informed the Senate in a statement that he had decided to nominate the CBN governor for a second term.

It is the first time since 1999, when Nigeria returned to democracy, that anyone would be nominated to serve two terms as CBN governor.

MPC Meeting Begins In Abuja

MPC Meeting, MPC, CBN, Anchor Borrowers Scheme, 683 FarmersThe Central Bank of Nigeria’s Monetary Policy Committee 2-day rate setting meeting begins on Monday in the nation’s capital city, Abuja.

It is the most anticipated meeting as it comes at a time the country is deep in recession following disappointing data from the National Bureau of Statistics.

The committee is expected to focus on the state of the Nigerian economy, and decide on key monetary policy parameters.

When the committee held its last meeting in July, headline inflation was at 16.5 percent but that has since increased to 17.6 percent in August.

In the light of severe and growing macroeconomic headwinds, the committee would once again be required to make tough decisions amidst limited policy options.

The CBN Governor, Mr Godwin Emefiele is expected to announce the outcome of the meeting on Tuesday, September 20.

Monetary Policy Committee Leaves Rates Unchanged

MPC, Central Bank, monetary policy, exchange rateThe Central Bank of Nigeria has decided to introduce a flexible exchange rate policy as it continues to monitor developments in the economy.

This announcement was made on Tuesday by the CBN Governor, Godwin Emefiele at the end of the two day rate setting meeting by the Monetary Policy Committee in Abuja, the nation’s capital which has been described as the most anticipated meeting.

According to Mr Emefiele, the Monetary Policy Rate will maintain status quo at 12%, Cash Reserve Requirement at 22.5%, Liquidity Ratio at 30% and maintain asymmetric corridor of +200/–500 basis points around the midpoint of the MPR.

MPC Retains Monetary Policy Rate At 11%

Monetary PolicyThe Central Bank of Nigeria (CBN) has announced plans to maintain the Monetary Policy Rate (MPR) at 11% as well and the Cash Reserve Ratio (CRR) at 20%.

Rising from its Monetary Policy Committee meeting on Tuesday, the Governor of the Central Bank, Godwin Emefiele said that the apex bank is also maintaining the asymmetric corridor of +200 basis points and -700 basis points around the MPR.

Speaking on the foreign exchange market, Emefiele said that there is need to improve the supply of foreign exchange to the market, especially from autonomous sources and maintain stability in the naira exchange rate.

He said that Nigeria is the only country where the apex bank sells to the bureau the change and as such the effect of the stoppage will not last too long.

He said the bank is fine-tuning the framework for foreign exchange management to ensure a more effective and liquid foreign exchange market.

CBN’s Monetary Policy Committee Begins 2-Day Meeting

Monetary PolicyThe Monetary Policy Committee of the Central Bank began its 2-day meeting on Monday at the nation’s Federal Capital Territory, Abuja.

Focus centered on how to make decisions that will drive the economy with particular discussions on the foreign exchange market.

The meeting, which is the first for 2016, comes against the backdrop of slowing global growth and a weakening domestic economic environment, due to the fall in oil prices.

Analysts at FBN Quest believe the depletion of official reserves, the slide in the oil price and other economic issues could make a good case for Naira devaluation.

The apex bank will make its pronouncements at the end of the meeting on Tuesday January 26.

Global Financial Markets     

In the meantime, central banks around the world will hold series of meeting this week to chart a way for monetary policies in their various countries.

The U.S. Federal reserve is expected to leave interest rates unchanged at its 2-day meeting which will end on Wednesday even before the recent rout in global stocks.

Equity prices from Japan to Brazil have tumbled into a bear market, China’s economy slowed and oil prices are lower, prompting European Central Bank President, Mario Draghi to warn on Thursday that downside risks have increased.

Analysts expect a rate hike this week from the Reserve Bank of South Africa with most predicting the MPC will go 50 basis points rather than 25, as it did in July and November.

The South Africa Rand tanked and bond yields soared after President Jacob Zuma fired Nhlanhla Nene as Finance Minister in December.

Economist Says Monetary Policy Inconsistency Unsettles People, Business

petrolAn economist, Austin Nweze, has criticised the recent decision of the Federal Government of Nigeria on the monetary policy of the nation.

This follows the recent decision of the Central Bank of Nigeria (CBN) to discontinue its sales of foreign exchange to the Bureau de Change operators and allowing banks to accept foreign currency cash deposits from their customers.

Mr Nweze said the inconsistency of the monetary policy had unsettled people and businesses.

“Companies are waiting, hoping that the CBN will reverse itself. Some companies I know have left the country because of this kind of policy,” he said.

The economist urged policy makers to make policies that will forecast future complications from the start.

“They should be far thinking to know the implication from the beginning; to know the implication to the economy, to the people before you engage yourself in this kind of policy.”

Mr Nweze, however, believes that the Central Bank Governor, Godwin Emefiele, wants to develop the manufacturing sector, but expresses worries that the capacity to take risk is not there.

“His comments shows that he wants the manufacturing sector to thrive in this country but doesn’t want to take a risk or maybe he doesn’t have the peril to take that kind of risk.”

The economist suggested that the CBN should meet with other stakeholders to deliberate on the type of economy on ground and what they want to achieve.

He also criticised the method being used in the anti-corruption fight, saying the government should focus on other things.

“All we see is expose. The institutions should be allowed to fight this thing and the government should focus on other things,” Nweze said.

He added that ‘all problem is not really corruption, all corruption lies in education’.

CBN Explains Restriction On Naira Debit Cards

Naira debitThe Director, Monetary Policy of the Central Bank of Nigeria, Mr Moses Tule, has been speaking on the recent restrictions on the use of naira debit cards and dollar transactions in the country.

At an interactive session with journalists in Abuja, Mr Tule said that naira debit cards can no longer be used outside the country due to the abuse it has suffered in the hands of some persons who use it to transfer foreign currencies illegally.

He said that the nation’s foreign reserves has been heavily depleted due to the fall in the price of oil and as such, the apex bank had to place some restrictions on the use of naira debit cards in addition to banning the use of the United States dollar as a substitute for the naira.

No Plan To Devalue Naira, CBN Insists

NairaThe Central Bank Governor, Mr Godwin Emefiele, has reiterated the bank’s stance on not devaluing the naira as many Nigerians would expect.

According to him, the naira is appropriately priced at the moment.

He, however, noted that the bank would continue to monitor the economy before it fashions out modalities to commence the devaluation.

The CBN boss, who spoke at the Monetary Policy Committee meeting in Abuja, also told journalists that the monetary policy rate has also been left unchanged at 13% following key macro economic indicators in the nation’s financial system

MPC Decision: Rewane Examines Impact On Average Nigerian

rewaneThe Managing Director of Financial Derivatives Company Limited, Mr Bismarck Rewane, on Wednesday, examined the outcome of the Monetary Policy Committee’s meeting on Tuesday.

The MPC had decided to leave key rates unchanged, including the Monetary Policy Rate, which remains at 12percent.

Appearing as a guest on Business Morning News on Channels Television, Riwane stated that, the “market is always tentative in anticipation of reactions of Committee but maintained that there were 3 dimensions to be considered, concerning the MPC’s decision.

Dimensions

He noted that the first concern was to “keep immediate monetary policy stable and to align monetary policy with monetary conditions”.

He further stated that the second dimension was tactical as the Committee had taken precautionary measures based on current market status and events to happen in the next 3 months.

He stressed that economic growth is a function of so many variables, interest rate targeted mainly in making sure that inflation is controlled.

And what Central Bank is doing is using leading indicators ahead of cycle to stimulate the economy.

 Impact On An  Average-man

Riwane noted that the impact on the average man “is not going to be obvious” based on past examples.

LCCI Asks CBN To Focus On Unemployment

web_prog_businessmorningThe Lagos Chamber of Commerce and industry, LCCI has asked the Central Bank of Nigeria to focus on unemployment rate as one of the key variables considered for its monetary policy decisions, among other issues.

The Director General of LCCI, Mr Muda Yusuf, a guest on this edition of Business Morning, wants the CBN governor, Mr Godwin Emefiele to quickly unveil the implementation guidelines on his new policy direction to allow for a more robust conversation and engagement.

He urged Mr Emefiele to come up with a roadmap that will ensure that the nation’s financial system contributes more to real sector growth.

Analysts Examine CBN Governor’s Performance In Office

As the tenure of incumbent governor of the Central Bank of Nigeria, Sanusi Lamido Sanusi, ends in less than five months from now, analysts are examining his level of performance in office. 

Today, on Channels Television’s programme, Business Morning, two economists, Mr Ayodele Teriba and Mr Henry Boyo x-rayed the CBN governor’s achievements and shortcomings since he assumed office.

They commended some of his efforts which include a more transparent monetary policy management which has helped in stabilizing the nation’s financial market.

For most of his five-year term, the policy thrust of Sanusi Lamido Sanusi has been towards tightening of monetary policy which to a large extent, has ensured a stable foreign exchange and price stability and has  instituted reforms that stabilised the banking sector.

However, the economists said that the CBN governor left out some key areas untouched as he focused more on financial stability other than economic stability.

According to the economists, the next CBN governor will have to contend with the same issues that the predecessor has had to grapple with in the last few years, such as Nigeria’s import dependency, inadequate revenue diversification and fiscal slippage among others.

They also believe that the upcoming elections will also add to more challenges to the new governor in his first year in office.