CBN Reacts To Claims Of Overfunding FG

Posted by Factnews | 7 years ago | 1,874 times


Godwin Emefiele, CBN Governor

The Central Bank of Nigeria, CBN, Governor, Godwin Emefiele, has defended the Bank's funding of the federal government through quantitative easing.

Emefiele noted that there was no substance in the claim that the central bank was overfunding the government, on the one hand, and mopping up liquidity through special auctions, on the other.

He dismissed the claim at the end of the two-day meeting of the Monetary Policy Committee of the CBN Tuesday, where the committee for the 14th consecutive month retained the Monetary Policy Rate at 14 per cent.

The MPC also retained the Cash Reserve Ratio at 22.5 percent, Liquidity Ratio at 30.0 percent, and the asymmetric corridor at -200 and -500 basis points around the MPR.

Emefiele, while speaking on the central bank's quantitative easing, said the CBN remained one of the most transparent in the world and there was nothing illegal about the use of Open Market Operations (OMO) as a means of money supply and control in the economy.

The governor was reacting to the observations made by one of the members of the MPC, Doyin Salami, who had at the July meeting of the committee remarked that the CBN was providing "piggy bank" services to the federal government.


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