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CBN Leaves Interest Rate Unchanged at 14%

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  • CBN Leaves Interest Rate Unchanged at 14%

The Central Bank of Nigeria led Monetary Policy Committee on Tuesday left interest rates unchanged as widely anticipated.

The CBN Governor, Mr Godwin Emefiele, who announced the decision of the committee at the apex bank’s headquarters in Abuja said the committee left Monetary Policy Rate unchanged at 14 per cent, while the Cash Reserves Ratio was left at 22.5 per cent.

Also, Liquidity Ratio was retained at 30 per cent; Asymmetric corridor at +200 and -500 basis points around the MPR.

The governor said the committee strongly considered tightening monetary policy to further curtail the threat of a rise in inflation and sustain capital inflow in the face of sustained monetary policy normalization in the US.

According to him, despite the deceleration in headline inflation, the 11.23 per cent inflation rate recorded in June remains above the apex bank’s 6-9 per cent target range. This, he supported with the possible implementation of approved 2018 budget, N9.12 trillion, pre-election spending and injection from fiscal authorities, which are expected to provide the economy with additional liquidity that could pressure consumer prices even more. Therefore, the committee believed higher interest rates would rein-in inflationary pressure towards projected single digit, build investors’ confidence and stabilize the foreign exchange market.

On the contrary, the committee was of the view that while raising interest rates could curtail inflation rate at this time, it would weaken consumption, reduce new investments, and trigger the re-pricing of financial assets by deposit money banks, thus limiting credit funding to the real sector.

However, in response to various calls for lower interest rate, the governor said lower monetary policy rate would aid consumption but hurt capital inflows, disrupt foreign exchange, and escalate inflation rate as liquidity to the economy is expected to increase once the federal government commence implementation of the 2018 budget.

Therefore, the seven of the ten-member committee voted to maintain current MPR, while two voted for 50 basis points increase, the remaining member voted for 25 basis points raise. Suggesting that the committee is likely to hike rate in the fourth quarter depending on the implementation of the 2018 budget, the level of pre-election spending, and the state of global economy, especially the U.S monetary policy, Brexit negotiation and global trade tensions.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Finance

Nestle Nigeria Approves Final Dividend of N35.50k per 50 Kobo Ordinary Share for 2020

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Nestle

Nestle Nigeria Approves Final Dividend of N35.50k per 50 Kobo Ordinary Share for 2020

Nestle Nigeria, a leading food and beverage company, has declared a final dividend of N35.50k per 50 kobo ordinary share for the year ended December 31, 2020.

The beverage company said N24.50k of the amount declared was from the after-tax profit of 2020 and N5 and N6 were from the after-tax retained earnings of the years ended December 2019 and 2018, respectively.

Nestle Nigeria stated that the amount declared is subject to appropriate withholding tax and approval at the Annual General Meeting of shareholders.

It also noted that payment will be made only to shareholders whose names appear in the Register of Members as at the close of business on 21 May 2021.

Dividends will be paid electronically to shareholders whose names appear on the Register of Members as at 21 May 2021, and who have completed the e-dividend registration and mandated the Registrar to pay their dividends directly into their Bank accounts.

Shareholders who are yet to complete the e-dividend registration are advised to download the Registrar’s E-Dividend Mandate Activation Form, which is also available on their website: www.gtlregistrars.com, complete and submit to the Registrar or their respective Banks.

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Banking Sector

Dennis Olisa Invests N53.6 Million in Zenith Bank

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Executive Director of Zenith Bank Plc Buys 2 Million Shares of Zenith Bank at N53.6 Million

Executive Director of Zenith Bank Plc, Dennis Olisa, has invested a combined N53.58 million in shares of Zenith Bank.

The leading financial institution stated in a disclosure statement filed with the Nigerian Stock Exchange (NSE) on Monday.

Olisa carried out the purchase in two different transactions on February 24, 2021 at the Nigerian Stock Exchange in Lagos, Nigeria.

He purchased 1 million units of Zenith Bank at N26.60 each and another 1 million shares at N26.50 per share.

On aggregate, Olisa purchased 2 million shares of Zenith Bank at N26.79 per share or N53.58 million. See the details below.

Dennis Olisa was appointed as Zenith Bank’s executive director three years ago.

Prior to his appointment, Mr. Olisa was the Chief Inspector at Zenith Bank Plc and served as its Director from March 3, 2017 until March 16, 2017.

He also served as General Manager and Heads of the Energy Oil & Gas Group at Zenith Bank Plc and served as its Deputy General Manager. He served as Head of Internal Control & Audit Group at Zenith Bank Plc

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Finance

Emefiele Pledges Accommodative Monetary Policy to Boost Economic Growth

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Godwin Emefile

Emefiele Pledges Accommodative Monetary Policy to Boost Economic Growth

The Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has pledged to adopt accommodative monetary policy stance in 2021 in order to support economic growth in the country.

Emefiele, said this on Friday, while speaking at a CBN/Bankers’ Committee’s initiative for economic growth, which is a one-day special summit on the economy by bank chief executive officers.

The theme of the summit is: “How to Overcome the Pitfalls of Recession.”

Nigeria’s economy recently came out of recession, according to the Gross Domestic Product report for fourth quarter 2020 released by the National Bureau of Statistics.

Owing to the slump GDP growth of 0.11 per cent that lifted the economy out of recession, Emefiele said it was imperative that, “we do all we can in 2021 and beyond to ensure that we build on the positive momentum and strengthen our efforts at stimulating growth.”

He expressed optimism that with the discovery and deployment of vaccines worldwide, 2021 would be a year of massive global recovery and Nigeria must not be left out.

“The banks CEOs are here, whether by moral suasion or by force, they will have to participate in this journey. In order to drive and sustain this recovery therefore, we need to sustain the accommodative fiscal and monetary policy measures aimed at improving access to finance for households and businesses.

“Secondly, we must prevent a resurgence in Covid-19 related cases. Thirdly, we must ensure that a significant number of our population is significantly vaccinated and also improve foreign exchange inflows into our country,” he added.

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