The Central Bank of Nigeria (CBN) led monetary policy committee has raised the nation’s borrowing cost by another 50 basis points following a 500 basis points increase in 2022 to 18%.

The committee attributed its decision to the rising inflation rate and the need to contain price development around expectations of subsidy removal and other energy sources.

“These in the view of members, provides a compelling argument for an upward adjustment of the policy rate, albeit, less aggressively. The Committee, however, noted that the naira redesign and cash withdrawal limit policies have resulted in a sizeable reduction in Currency-Outside-Banks, indicating an expected improvement in the potency of monetary policy tools,” the minutes stated.

Another factor considered was the drop in capital importation and the impact of exchange rate pressure on domestic price levels.

The committee, therefore, called for policies to attract both portfolio and foreign direct investment to Nigeria.

It maintained optimism that, the continued progress made with the RT200 FX programme, Naira-4-dollar and
other policies targeted at attracting diaspora remittances, would continue to help improve accretion to the external reserves and improve liquidity in the foreign exchange market.

Members, however, remained aware of the ongoing challenges associated with the limits imposed on cash withdrawals in the face of frequent downtime in bank electronic transaction channels. The Committee thus called on Other Depository Corporations, online payment platforms, and other stakeholders to ensure that the prevailing incidence of network failures is overcome in the immediate and short term.

This would ensure that the Naira Redesign and Cash Withdrawal Limit Policies lead to an improved in-road of the CBN Cashless program and efficiency of the transmission mechanism of monetary policy.

Members, therefore, agreed to raise Monetary Policy Rate by 50 basis points, with ten members voting to raise the MPR by 50 basis points while one member voted to raise the MPR by 25 basis points and one member voted to hold the MPR. All members voted to keep all other parameters constant.

The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele has said that about N1 trillion is currently in circulation and more redesigned naira notes will be made available to the citizens.

This is as he apologised for the increase in failed digital bank transactions, promising that the online payment system hitches will be resolved soon.

The CBN governor spoke on Tuesday at the close of the two-day monetary policy committee meeting held in Abuja.

Investors King reports that Nigerians have been faced with cash scarcity since January, 2023 and recently, rise in failed electronic bank transactions done through bank mobile apps, debit cards and USSD channels making payment more difficult.

Emefiele assured that the CBN payments system management department are working on it to ensure that the situation is improved and electronic banking channels are resolved on time.

He commended the fintechs for complementing payment channels to reduce the workload on traditional banks in Nigeria.

His words, “I must apologise. Yes, online channels fail. But no doubt it is as a result of the deluge of online transactions that hit the banking industry. But it is being resolved,” Emefiele said.

“On a daily basis, our payments system management department monitors the online payment platforms so as to make sure that when there is a downtime, they are quickly resolved so that transactions can go on smoothly.”

According to the CBN Boss, the apex bank is working to ensure that more redesigned notes are circulated but are not kept outside the bank as the redesign policy aims to checkmate storing money in other places.

He gave the details of the redesigned naira notes pumped into circulation at the beginning of the policy as N3.23 trillion, of which only N500 billion was kept in bank accounts while N2.73 trillion was stored outside the banks.

“It was published yesterday that currency in circulation is close to N1 trillion. CBN will continue to pump the newly redesigned currency into the market.

“The truth is that at some point we will need to reassess to know whether the currency in circulation has attained an optimal level so as to put in place measures to ensure that we don’t go to the level where we were when people kept money outside the banking system for their own benefits,” he added.

First Bank of Nigeria Limited, Nigeria’s premier and leading financial inclusion services provider has announced the call for participation in the third season of its FirstBank Management Associate Programme (FMAP).

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The application is extended to the general public as it closes by 24 March 2023.

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Since its launch in 2018, FirstBank has successfully trained and onboarded up to fifty talented individuals in 2 editions (2020 and 2022), who have all been deployed into strategic roles in the Bank and making a difference in the organization, while we continue to support their leadership growth and development.