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Economy

BREAKING: CBN raises interest rate to 17.5%

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Kayode Sanni-Arewa

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The policy-setting committee of the Central Bank of Nigeria (CBN) has raised the monetary policy rate (MPR), which measures interest rate, from 16.5 percent to 17.5 percent to tame rising inflation.

In December, Nigeria’s inflation rate fell slightly from 21.47 percent to 21.34 percent.

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The monetary policy rate (MPR) is the baseline interest rate in an economy, every other interest rate used within an economy is built on it.

Godwin Emefiele, governor of the apex bank, announced the development to journalists on Tuesday after the committee’s meeting at the CBN headquarters in Abuja.

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Economy

New Naira: Border Communities, Markets In Sokoto Abandon Naira, Trade In CFA

Withdrawals, Governors, CBN, notes, new naira, Banks
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By Gloria Ikibah

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Residents of some communities and markets in the Illela Local Government Area of Sokoto State have abandon the Nigerian naira for the CFA franc due to shortage of New Naira Notes as gathered.

Investigations revealed that Illela, a border town with Niger Republic and about 105 kilometres from Sokoto, now has most of its traders and residents trading, selling and buying in CFA franc.

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The Central Bank of Nigeria CBN had earlier set the deadline for the old N200, N500 and N1000 for January 31, 2023 but due to the scarcity of the new naira notes and its attendant effects on the economy, the deadline has been extended till February 10.

A resident of Sabon-Gari, a town in Illela of Local Government Area, identified as Yusuf Sani revealed that he had changed all his Naira notes to CFA because of the difficulty in getting New Naira Notes in the region.

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“I decided to have only CFA because people are not collecting Old Naira Notes again. The ATM does not even dispense. You can only get New Naira Note from POS, which is around N200 to N300 per N1,000

The Nigerian Central Bank, CBN had earlier set the deadline for the old N200, N500 and N1000 for January 31, 2023 but due to the scarcity of the new naira notes and its attendant effects on the economy, the apex bank extended the deadline for the exchange of old naira notes for newly designed ones till February 10.

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A resident of Sabon-Gari, a town in Illela of Local Government Area, identified as Yusuf Sani revealed to SaharaReporters that he had changed all his Naira notes to CFA because of the difficulty in getting New Naira Notes in the region.

“I decided to have only CFA because people are not collecting Old Naira Notes again. The ATM does not even dispense. You can only get New Naira Note from POS, which is around N200 to N300 per N1,000

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“This is why it is safe to have CFA,” he explained.

According to Sani, it will be easier for him to spend the foreign currency because his town is close to some communities in the Niger Republic.

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Abu, a trader at the ILLELA International Cattle Market, added that while it is not unusual to see some traders using CFA in the markets, most traders now exclusively use CFA due to the non-circulation of the New Naira Notes.

He said, “In this market, we have many people from neighbouring countries that come here to do business, particularly in cattle. So they bring foreign currency like CFA. But for the past few weeks, spending of Naira is now becoming difficult because no one is ready to collect the old Naira notes.”

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Days ago, the Arewa Consultative Forum, the northern socio-cultural group, had urged the Nigerian government to prolong the deadline for the expiration and collection of old naira notes in the country.

In a statement issued by Bello Galadanci, Publicity Secretary, Arewa Consultative Forum, ACF, Kano State Chapter, the group had said the public was suffering greatly as a result of people’s refusal to accept old naira notes in commercial transactions out of concern that they might not be able to deposit them in commercial banks.

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The statement had read: “This has currently made life more difficult for ordinary citizens, because banks, up till now, still give out the old naira notes to customers with the deadline only a few days away.

“We appeal to the Federal Government to reconsider its decision by extending the deadline for the expiration of old naira notes to enable residents to swap their old naira with the new naira notes.”

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Economy

New cash policy will stabilise exchange rate, strengthen naira among others-Emefiele

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By Gloria Ikibah

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The Governor of Central Bank of Nigeria (CBN), Godwin Emefiele has said that the new cash withdrawal limit policy has moderated inflation, helped in stabilizing exchange rate, strengthened the naira, support activities of security agencies and reduce incidences of ransom taking in the country.

Emefiele revealed this when he appeared before the House of Representatives Ad-hoc Committee on the review of the CBN cashless policy and extension of timeframe of the currency swap programme.

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He asserted that the collection of the old notes has successfully attained 75 per cent implementation level at the rural areas, through the 30,000 super agents (agency bankers) deployed by the CBN, out the 1.5 million bank agents spread across the country.

According to Emefiele, the new naira redesigned policy was in the overall interest of Nigerians and he assured that no Nigerian will lose money under the new naira design policy.

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“We are a happy so far the exercise has achieved over 75 per cent in our villages and the rest of them. So it is on the basis of that we saw that there are a few complaints in the villages an that is why we said, we will now give a 10-day extension for more of the currency to be collected and then do more disbursement.

“I want to make my last comment, subject to the CBN Act section 20 sub section 3 which state even after the old currency has lost its legal tender status that we are mandated to collect those monies and I stand with the house of Representatives on this. What does that mean? It would have lost its legal tender status, in this case we have moved on, but if have nit been able to send it to the bank we certainly will give you the opportunity to bring them back into the CBN to redeem it. Either you pay into your bank account or you want to do exchange we will give you your money, that is the assurance that I give Nigerians”, Emefiele stated.

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The CBN Governor affirmed that the new naira notes were being used at parties, Deposit Money Banks erred by breaching certain aspects of the guidelines of the new policy, and so the resolve to involve Economic and Financial Crimes Commission (EFCC), Independent Corrupt Practices and other Related Offences Commission (ICPC) and Nigeria Financial Intelligence Unit (NFIU) is all to ensure the flow of the new currencies.

To ensure effective implementation of the new policy, the CBN Governor insisted that the disbursement of the new naira notes can only be done through the ATMs in order to ensure equitable distribution of the redesigned currency.

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Speaking on the ongoing efforts to ensure adequate control and monitoring of the currency in line with the CBN Act, 2007, Emefiele stated that in 2015 the currency in circulation was N1.4 trillion, has risen to N3.32 trillion as at October 2022, revealing over 100 percent increase within a period of seven years.

He further noted that out of the N3.23 trillion, more than N2.37 trillion are outside the banks while more than N2.7 trillion were in people’s homes and added that about N500 billion is seen in the banks before the implementation of the new cash policy.

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He however observed that, with the implementation of the new currency policy, the apex bank has been able to collect N1.7 trillion out of the N2.7 trillion, leaving between N900 billion and N1 trillion yet to be recovered into the apex bank’s vault.

He said: “I want to appeal this is not an easy exercise but we are happy that in 19 years we are able to carry out this important aspect of our mandate. We are grateful that we are doing this, we want to do this but we seek the support and cooperation of everybody, support and cooperation of Nigerians. At this initial stages there will be a few hitches, there will be a few hitches, we apologise.

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“What I am trying to say is this, the overriding issues is to make the Nigerian economy stronger, make Nigerian economy better because that is what we owe Nigerians in the position that God has put us today and I will like to continue your support, that please you will allow this programme to succeed,” the CBN Governor stated.

After the consideration of the recommendations of the Ad-hoc Committee chaired by Hon. Alhassan Ado-Doguwa, the House mandated the CBN Governor to submit weekly report on all the new naira notes released to the Deposit Money Banks (DMBs).

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The House also mandated the CBN Governor to ensure further review of the new naira notes are available forthwith.

In the event of the persistence of the current situation, the CBN Governor should extend the deadline beyond February 10, 2023.

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Speaking earlier at the interactive session, Hon. Ado-Doguwa said: “Our major concern is about the critical situation of the Nigerian economy. The concern of the House of Representatives is about the protection and guidance of what we call the rule of law under a democratic system.

“This House by all standard has the constitutional right and by the operating rules and guidelines of the House, we also has the official power, the constitutional power to invite any agency of government, to interface with their officials about the policies of government because government is about good governance, good governance is about the livelihood of the people.

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“What we think ordinarily is going to be in the best interest of the Nigerian man, I mean the common man on the street.

“This is one policy, I want to be very categorical, that has actually touched on the lives of our people, it has kick-started a lot of controversy, left right and centre and we have seen that written on the faces of our people, so many people are not giving up 24 by seven to have access to the new naira notes. Economic activities, trading, in fact even online transfer has been shut down by this policy you brought about,” he noted.

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While acknowledging that the House is in support of the cashless policy initiated by the apex bank, he noted, “the House will see how we can partner with you on the policies that are good. But when policies are now coming up in the eye of too much storms in the face of the people, storming the economy, shutting agriculture, storming transportation and constituents crying out, then of course, we have moral obligation to seek clarifications from you.

“By the CBN Act, yes the Governor has the power to redesign the naira. Yes it’s your singular power and we must help you protect that power in the interest of the Nigerian people.

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“However, one of the burning questions, is that yes you have the powers, yes you are protected by law to redesign the naira, why this time? This time because you cannot rule out this contemplation that we are facing when you are facing a general election, less than 30 days to an election you bring up this matter of this nature. Definitely people will ask questions”.

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Economy

New Naira: Reps Adhoc Committee submits report To House

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….Say CBN to monitor cash releases to commercial banks weekly

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By Gloria Ikibah

The House of Representatives ad-hoc committee to investigate the scarcity of the new Naira notes and cashless policy has submitted its report to the House.

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The report was laid on the floor of the House, by chairman of the Committee and Leader of the House, Hon. Alhassan Ado Doguwa on Tuesday at plenary.

The Committee also recommended that cash releases by the Central Bank of Nigeria CBN to deposit money banks should be monitored on a weekly basis and the report sent to the committee.

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Naijablitznews.com reports that the submission came after the committee met with the CBN Governor Godwin Emefiele Tuesday.

Hon. Doguwa explained that the Committee finally met with the Governor of the Apex Bank after several invitations and also a meeting with Managing Directors of deposit money banks was held earlier.

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“The Committee in analyzing information from all quarters found out that the new notes are scarce in commercial banks.

“The Central Bank governor agreed with the position of the House that the old notes can be redeemed by banks at any time of presentation.

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The recommendations of the Ad-Hoc Committee includes:

I. The Ad-Hoc Committee will continue to work with the Central Bank and commercial banks to ensure the cashless policy and cash-swap policy will not affect Nigerians adversely and that the CBN will submit a weekly report to the Ad-Hoc Committee on currency releases to commercial banks.

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II. CBN should operationalize the provisions of Section 20 (3) of the CBN Act to the effect that the currency gets redeemed after the deadline.

III. The CBN is to ensure the availability and issuance of new notes to Nigerians

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IV. That the ad Hoc Committee continue to work considering that the House is going on break while the issue at stake requires further attention of the Special Committee.

V. Restore the over-the-counter transaction to the old limit before the new policy was introduced.

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Speaker Femi Gbajabiamila commended the Ad-Hoc Committee for its dedication and diligence and also the lawmakers for the sacrifice to see the matter resolved in the interest of Nigerians.

Hon. Gbajabiamila was optimistic that the suffering facing Nigerians over accessing the new notes will begin to abate following the CBN governor’s assurances and that the supply of the new notes will improve drastically.

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He however berated banks that were hoarding the new naira notes and supplying in bulk to influential customers at the detriment of other Nigerians.

The Speaker therefore called on the CBN to make the new notes more available to Nigerians across the country, both in rural and urban areas.

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