CBN shifts first MPC Meeting under Cardoso to February
20-Jan-2024 / 172
The Central Bank of Nigeria (CBN) has scheduled the first Monetary Policy Committee (MPC) Meeting, under the tenure of Olayemi Cardoso as Governor, for February 26 and February 27.
According to a Statement by CBN’s Acting Director, Corporate Communications Department, Hakama Sidi-Ali, the Apex Bank , consequently, held a two-day Strategic Session for Members of the MPC preparatory to the Meeting.
Sidi-Ali said that the Session aimed to brainstorm and engage in an in-depth discussion about the Committee’s objectives.
She said that the critical focus Areas during the Retreat include deliberations on the Strategic Plan to effect necessary improvements in the Monetary Policy Transmission Mechanism.
She said that the Sessions were facilitated by former MPC Members, Monetary Policy Communication Specialists from the IMF and Directors of Departments critical to the MPC Process.
“The valuable insights gained from these discussions will significantly contribute towards the robustness of the forthcoming MPC Meetings,” she said.
The last meeting of the MPC was held in July 2023, and was presided over by erstwhile Acting Governor, Folashodun Shonubi.
At the July 2023 Meeting, the MPC raised the Benchmark Interest Rate, known as the Monetary Policy Rate (MPR), by 25 Basis Points to 18.75 per cent from 18.50 per cent.
Meanwhile, a Calendar of Meetings of the Monetary Policy Committee (MPC) for 2024 published on the CBN Website indicates that the Meetings have been scheduled for February, March, May, July, September and November.
The Central Bank of Nigeria (CBN), has removed allowable limit of Exchange Rate quoted by the International Money Transfer Operators (IMTOs).
This is according to a Circular signed by Hassan Mahmud, the Director, Trade and Exchange Department of the CBN, addressed to IMTOs and the General Public.
According to Mahmud, the directive is in line with the CBN’s commitment to liberalise the Nigerian Foreign Exchange Market,
”IMTOs are hereby allowed to quote Exchange Rates for Naira payout to Beneficiaries based on the prevailing Market Rates at the Nigerian Foreign Exchange Market on a Willing Seller, Willing Buyer Basis.
“For the avoidance of doubt, by this Circular, the cap on allowable limit of -2.5 per cent to +2.5 per cent around the previous day’s Closing Rate of the Nigerian Foreign Exchange Market is hereby removed.
“Authorised Dealers, IMTOs and the General Public are hereby informed to note and comply accordingly,” he said.
The Apex Bank had earlier directed Deposit Money Banks (DMBs) to sell their excess Dollar stock in a bid to stabilise the Exchange Rate.
The CBN also cautioned the DMBs against hoarding excess Fx Currencies for Profit.
Meanwhile, Bureaux De Change in Abuja observed a “No Sales” Policy on Thursday due to acute scarcity of Foreign Exchange.
CBN says Report on plans to convert Domiciliary Accounts into Naira 'absolute false'
04-Feb-2024 / 172
The Central Bank of Nigeria (CBN) says it has no plans to convert Domiciliary Account Holdings valued at $30bn into Naira.
Hakama Sidi-Ali, CBN’s Acting Director, Corporate Communications Department, made the clarification in a Statement in Abuja on Saturday.
Sidi-Ali’s Statement was a reaction to a Media Report that the Apex Bank planned to convert Domiciliary Accounts into Naira, to address the unending depreciation of the Local Currency.
“The attention of the CBN has been drawn to a story published by a National Newspaper, alleging that the Federal Government is considering converting $30bn Domiciliary Deposits to Naira.
“This allegation is absolutely false and aims to trigger panic in the Foreign Exchange Market, which the CBN is working assiduously to stabilise, as evidenced by its recent Work and Policy Directions.
“Similar false narratives have been spread on the work of the CBN over the past few months and it is clear that vested interests are determined to sabotage our efforts,” she said.
She assured that the CBN was working to build confidence and would never do anything to undermine the Currency and the Economy.
She urged all Stakeholders to disregard stories aimed at causing panic in the System and see them as acts of National sabotage.
“We wish to advise, in the strongest terms, against the peddling of false Reports that have the potential to be disruptive to the Economy.
“The CBN is the only Designated Authority for Monetary Policy changes and will always advise on any Policy changes before they are brought into operation.
“The CBN is always open to answer questions about our Policies,” she said.
The Naira has been on a free fall in the last few days, exchanging at N1,500 to the Dollar.
This has created panic among some Stakeholders who have been calling on the Apex Bank to take urgent steps to strengthen the Naira.
The Governor of Central Bank of Nigeria (CBN), Yemi Cardoso says the Naira is grossly undervalued.
Cardoso said this on Tuesday in Abuja, while presenting a Communiqué from the 293rd Meeting of the Apex Bank’s Monetary Policy Committee (MPC).
He said that the Foreign Exchange Market had not been functioning effectively and had been distortionary in outcome, thereby creating a serious challenge for the Naira.
“We are presently investigating some of the manipulations that have been taking place.
“For distortions that came up due to bad behaviour, those involved will be made to face the full wrath of the Law,” he said.
The CBN Governor said that the Apex Bank was clearing the backlog of genuine Forex Claims, adding that the Country’s Foreign Reserves now stood at $34bn
“Just today, we paid another $400m to those that have been so identified,” he said.
He said that it was important that the Foreign Exchange Market had a good amount of Liquidity and minimal distortion.
“In recent times we have been able to attract Liquidity into the System.
“We have attracted up to two $2bn as a result of the tools that we have used to calibrate Interest Rate.
“We are collaborating with Law Enforcement Agencies to ensure that we can understand better what is going on in the Market.
“We are moving to a very aggressive Regulatory Environment where we will have zero tolerance for Sharp Practices,” he said.
“He said that Players in the Market would have to abide by all CBN Regulations as those who refuse would face the consequences.
According to him, a very thorough exercise is going on to identify what went on in the past and what needs to be done.
Cardoso said that the CBN was moving away from Interventions Programmes and Development Finance Initiatives like the Anchor Borrowers Programme, as they were time-consuming and counter productive.
“Everybody’s concern js about Price Stability, and we should put everything we have into ensuring Price Stability.
“The Interventions took away a lot of time for things we do not have the expertise to do, and it created a lot of distortions in the Economy through inflow of Money Supply.
“The Interventions that took place in the recent past were estimated in excess of N10trn. It did a lot of damage to the Economy, ” he said.
He, however, said that the Apex Bank was taking concrete steps to recover Loans that were given out through such Interventions.
The Tuesday’s MPC Meeting was the first under Cardoso as CBN Governor.
Earlier, Cardoso had announced an aggressive tightening of the Rates, as the Committee increased the Benchmark Interest Rate, the Monetary Policy Rate (MPR) by 400 Basis Points from 18.75 per cent to 22.75 per cent.
The Committee also raised the Cash Reserve Ratio (CRR) from 32.5 per cent to 45 per cent, and adjusted the Asymmetric Corridor from +100/-300 Basis Point to +100/-700 Basis Point around the MPR.
It, however, retained the Liquidity Ratio at 30 per cent.
CBN's Reforms to check rising Inflation, says Cardoso
28-Feb-2024 / 172
The Central Bank of Nigeria (CBN), says its on-going Reforms will check rising Inflationary trend and address distortions in the Foreign Exchange Market
The CBN Governor, Yemi Cardoso said this on Tuesday in Abuja, while presenting the Communique from the Apex Bank’s Monetary Policy Committee (MPC) Meeting.
Cardoso had announced the Committee’s decision to adopt aggressive Inflation-targeting by increasing the Benchmark Interest Rate by 400 Basis Points from 18.75 per cent to 22.75 per cent.
According to him, the argument leaned convincingly in favour of a significant Policy Rate hike to force down Inflation substantially
He said that the MPC deliberated extensively on various distortions in the Foreign Exchange Market, including the activities of Speculators, putting upward pressure on the Exchange Rate with “high pass-through” to Inflation.
Cardoso said that the MPC also identified Non-Monetary Factors driving Inflation, like the persisting Insecurity and Infrastructure Deficits.
“It notes the role of Fiscal Policy in addressing these shortfalls, while reiterating the commitment of Monetary Policy support.
”In this regard, the Committee applauded Fiscal Policy Initiatives towards reducing the Cost of Living for Ordinary Nigerians, including the ongoing efforts to improve Food Supply,” he said.
He said that Headline Inflation rose to 29.90 per cent in January from 28.92 per cent in December 2023.
According to him, Food Inflation increased to 35.41 per cent from 33.93 per cent, while Core Inflation rose to 23.59 per cent from 23.07 per cent.
”The major factors driving inflationary pressure remains Exchange Rate pass-through, rising Cost of Energy, high Fiscal Deficits, and lingering Security challenges in major Food-Producing Areas.
“In addition, global factors such as tight financial conditions and trade disruptions from ongoing geo-political tensions, remain significant upside risks to the outlook for domestic inflation.
“Staff Forecasts, therefore, indicate that Inflation will remain on an upward trajectory in the near term before commencing a descent,” he said
He said that Members of the MPC were convinced that the ongoing Reforms in the Foreign Exchange Market would yield the desired outcome in the Short to Medium Term.
He listed some of the Reforms to include the Unification of the Foreign Exchange Market and promotion of a Willing Buyer Willing Seller Market.
Others are removal of all limits on margins for International Money Transfer Operators (IMTO) Remittances, introduction of a Two-Way Quote System and the broad Reforms in the Bureau De Change (BDC) Segment of the Market.
“The Committee reviewed the key Financial Indicators of the Banking System and noted that the System remained stable.
“To further ensure the stability of the Banking System, the MPC called on the CBN to increase System buffers by recapitalising the Banks to improve resilience against potential risks.
“Members further enjoined the CBN to strengthen surveillance and compliance regarding its earlier guidance on the application of Foreign Exchange Revaluation Gains,” he said.
CBN blacklists 4,173 BDCs over failure to observe Regulations
01-Mar-2024 / 171
The Central Bank of Nigeria (CBN), has announced revocation of Operational Licences of 4,173 Bureaux De Change (BDCs) for failure to observe some Regulatory Provisions.
According to a Statement issued by CBN’s Acting Director, Corporate Communications Department, Hakama Sidi on Friday in Abuja, the move is in exercise of the Powers conferred on it under the Bank and Other Financial Institutions Act (BOFIA).
Sidi said that the list of affected BDC Operators was available on the Bank’s Website.
She said that the affected Institutions failed to observe at least one of the following Regulatory Provisions:
They are payment of all necessary fees, including Licence Renewal, within the stipulated period in line with the Guidelines.
Others are the rendition of Returns in line with the Guidelines and compliance with Directives and Circulars of the CBN, particularly Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT) and Counter-Proliferation Financing (CPF) Regulations.
“The CBN is revising the Regulatory and Supervisory Guidelines for BDC Operations in Nigeria.
”Compliance with the new requirements will be mandatory for all Stakeholders in the Sector when the Revised Guidelines become effective.
“Members of the Public are hereby advised to take note and be guided accordingly,” she said.
Cardoso gives pass mark to Nigerian Banks, says they're safe, sound, stable
27-Mar-2024 / 158
The Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, says recent stability achieved in the Foreign Exchange Market is commendable.
Cardoso said this on Tuesday in Abuja, while presenting the Communique from the 294th Meeting of the Apex Bank’s Monetary Policy Committee (MPC).
According to Cardoso, the stability is a result of CBN’s recent Policy Actions and Reforms, which are geared towards restoring Investors’ confidence and attracting Foreign Investments.
“The Committee noted with satisfaction the level of stability achieved in the Foreign Exchange Market in the last few weeks.
“This, in the view of Members, reflects the impact of the CBN’s recent Policy Actions and Reforms, as well as increased transparency in the Market.
“In addition, the Committee noted the efforts of the Apex Bank in offsetting verified Foreign Currency Obligations, an action that will greatly enhance Investor confidence and attract Foreign Investments to Nigeria,” he said.
Cardoso said that the MPC also reviewed developments in the Banking System and noted that the Industry remained safe, sound and stable.
He said that the Apex Bank would sustain its surveillance and ensure compliance of Deposit Money Banks with existing Regulatory and Macroprudential Guidelines.
The CBN Governor said that Domestic Headline Inflation rose further to 31.70 per cent in February from 29.90 per cent in January.
According to him, Food Inflation accelerated to 37.92 per cent from 35.41 per cent, while core inflation rose to 25.13 per cent from 23.59 per cent.
“Key drivers of Inflationary pressure remain the strong Exchange Rate pass-through to Domestic Prices; rising Cost of Transportation; high Cost of Energy and other Production Inputs.
“Lingering Insecurity, especially in Food Producing Areas and legacy Infrastructure Deficits are also responsible,” he said.
He said that the Committee would continue to monitor developments in the Global and Domestic Economies to ensure that Inflationary expectations were anchored to restore and sustain Macroeconomic stability.
Comments
Be the first to comment on this post
Leave a Reply