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CBN may issue more policies to fix economy before next MPC meeting

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Signals to churn out additional strategic policies when necessary before the next Monetary Policy Committee (MPC) next year have emerged from the Central Bank of Nigeria (CBN).

Otherwise, the bank has not left everything till the nest meeting, meaning that it will between now and March next year issue more policies in the banking industry to drive the nation towards economic recovery.

Already, such policies have started coming as only last week, the CBN reduced the money in circulation due to the current inflation.

It would be recalled that the revenue shared among the three tiers of government could not boost the quantity of money in circulation, because the financial system regulators had sold debt instruments to mop up the cash.

The apex bank used the Open Market Operations to withdraw N8.3 billion, while the short-dated treasury bill’s issuance attracted N177 billion. Besides, the week also coincided with the period of Cash Reserve Ratio deductions.

This was revealed by the Governor of the CBN; Godwin Emefiele who maintained that even though the fiscal authority is being constrained by bureaucracy in taking strategic decisions, MPC and fiscal arm are working together in addressing the economic challenges of the nation.

He cited instances of the bureaucratic hiccups of the fiscal authority in the ongoing back and front movement in the $30 billion bond which the federal government is seeking legislative approval to raise.

While stressing that the apex bank has no such challenges, Emefiele said the operators in the financial industry should be prepared to see more policy issuance that would be geared towards reviving the economy.

Speaking at the quarterly meeting of the Chief Audit Executives of Banks held in Lagos he said, “in this era of change and challenge, you will notice and should continue to expect a stream of policy initiatives from the CBN. Our objective is to use monetary policy tools, sectoral preferences in resource allocation and other forms of intervention to drive our national economic recovery.”

Represented by his Special Assistant on financial markets, Emmanuel Ukeje at the meeting, Emefiele said in his keynote address that Deposit Money Banks are critical players for the realization of the overall thrust of the Government and CBN, and as such are expected to faithfully implement apex bank’s policies and guidelines.

The keynote address hinged on ‘Changing Business Environment: The Role of Internal Auditors’.

While urging the bank audit executives to play their own role towards ensuring that Nigerian banks remain healthy and stress-free so that they can absorb any unexpected shocks, he noted that at this crucial point in Nigeria’s financial history when money is scarce and there is a noticeable decline in the purchasing power of the people, there was need for stakeholders in the economy to collaborate in order to turn the current situation into future prosperity.

The CBN governor also urged audit executives to be very vigilant and guard against fraud, because as internet penetration continues to gather steam in Nigeria, greater volumes of transactions will be consummated online; and on various electronic formats and platforms.

According to him, “as is the case in all systems and climes, some people including bankers and customers, may be tempted to take undue advantage of the occasional loopholes that may arise in the course of the expected policy readjustments. As internal auditors, you must not allow or encourage this. I encourage you to insist that your banks, as institutions, comply fully with all CBN Guidelines; and raise a warning flag when they fail to do so.”

Emefiele further outlined areas that should engage the attention of the executives over the next couple of years, stressing that banks must maintain good internal control, ethical practice and sound risk management, adding that Nigerians expect this, especially at a time of challenging operating environment.


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