The Central Bank of Nigeria, CBN governor, Godwin Emefiele, on Tuesday allayed fears by owners of domiciliary accounts that the government planned to confiscate or covert the funds in such accounts for any reason.
The governor, who was speaking in Abuja at the end of the 248th meeting of the Monetary Policy Committee, MPC, said allegation that the government was contemplating converting the $20 billion reportedly idling away in individual domiciliary accounts was unfounded.
“There is no intention; there will never be that intention,” Mr. Emefiele said in answer to a question on the issue. “It is not within the view of the bank to begin to talk about converting people’s domiciliary accounts. This should be taken seriously.
“The banks will continue to allow domiciliary account holders unfettered access to the funds in their accounts. What we are trying to do is to make the market open as much as possible and not create further tightening situations that would create problems for the economy.”
He described as wrong insinuations that the funds in the accounts were idle, explaining that they were liabilities in the balance sheets funding certain various assets on the side of their owners.
Mr. Emefiele, who spoke on some of the resolutions from the two-day meeting, said members resolved to raise the monetary policy rate, MPR, which is the approved rate banks would lend money to investors, by 100 basis points from 11 per cent to 12 per cent and cash reserve ratio, CRR by 250 basis points 20 per cent to 22.5 per cent.
The committee also agreed to retain liquidity ratio at 30 per cent, while narrowing the asymmetry corridor from +200 and -700 to 200 basis points and -500 basis points.
On the proposed streamlining of foreign exchange guidelines, the CBN governor apologised that the decision was being delayed, saying consultations were on-going with various interest groups on how to improve FX supply.
“As soon as we are able to achieve tangible success in this direction we will unfold this to Nigerians. We are hoping that with time the supply of foreign exchange would be improve,” he said.
Mr. Emefiele said during the previous meeting, the CBN had adopted an accommodating monetary policy introduced since July 2015 to address the growth concerns in the economy.
The policy of lowering both the CRR and MPR, he pointed out, was to effectively free more funds for the deposit money banks to have excess liquidity to lend to those who were able to submit verifiable investment proposals in the real sector of the economy.
He however expressed regrets that the funds have not impacted the market yet, because the banks were still processing some of the proposals submitted to them.
The CBN governor noted the impact of the delay in passing the 2016 budget on the economy, saying this worsened the difficult financial conditions of economic agents, as output continued to decline due to low investment arising from weak demand.
He identified factors that hampered economic growth during the period under review, namely the dismal performance in growth in credits to the private sector, lingering scarcity of refined petroleum products, seasonal factors and increased electricity tariffs.
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