The Central Bank of Nigeria (CBN) has said it is prepared to manage possible increases in money circulation and liquidity as Nigeria enters the election season.
CBN governor, Olayemi Cardoso, gave the assurance while briefing journalists on the decisions of the 307th Monetary Policy Committee (MPC) meeting.
He assured that it will deploy appropriate measures to prevent excess liquidity from undermining the progress made in stabilising the economy.
According to him, the apex bank had conducted extensive analysis and modelled different scenarios around election-related spending.
“We are ready. We’ve done a lot of analysis in understanding how this market transforms itself during an election period. We have sensitised different scenarios, looked at different models and debated things to great lengths,” he said.
Cardoso said the bank would closely monitor currency in circulation, banking system liquidity, monetary aggregates and foreign exchange demand during the period, stressing that its decisions would be guided by data rather than assumptions.
“We will not base things on assumptions. We will carefully monitor currency in circulation, banking system liquidity, monetary aggregates and foreign exchange demand and act accordingly,” he said.
He added that the CBN would proactively deploy monetary policy tools to mop up any excess liquidity that could emerge during the election period.
“We will proactively deploy any tools and instruments to mop up any excess liquidity as it has to. We are going to be proactive. We will not allow ourselves to be caught unawares in any form,” Cardoso said.
The governor also assured Nigerians that adequate currency would be available, while warning that the apex bank would not tolerate currency abuse or violations of existing limits.
He said the CBN would intensify its monitoring and work with law enforcement agencies, while encouraging electronic payments because of the transparency and transaction trail they provide.
LEADERSHIP earlier reported that
the CBN had reset the Monetary Policy Rate (MPR) to 23 per cent from 26.5 per cent, representing a 350-basis-point reduction, while retaining the Cash Reserve Requirement (CRR) for deposit money banks at 45 per cent.
We’ve got the edge. Get real-time reports, breaking scoops, and exclusive angles delivered straight to your phone. Don’t settle for stale news. Join LEADERSHIP NEWS on WhatsApp for 24/7 updates →
Join Our WhatsApp Channel
