Dr. Olayemi Cardoso, Governor of the Central Bank of Nigeria, has said the central bank’s actions will effectively combat inflation in the next two quarters.
Cardoso made the remarks during his keynote lecture at the 58th Bankers Dinner of the Chartered Institute of Bankers of Nigeria in Lagos on Friday night.
According to him:
“While absolute inflation is still rising, the declining rate of growth indicates progress. The CBN is confident that with continued tightening measures for the next two quarters, we will be able to effectively manage inflation.”
The head of the Central Bank stated that the bank’s efforts over the last two months had shown success in clearing the backlog of foreign exchange.
He said:
“I am happy to report that our efforts over the past two months have begun to yield fruit. The activities include the following: Regular Open Market Operations to mop up excess liquidity from the banking system. An OMO auction was recently held with a top rate of 17.5 per cent for the one-year tenor, attracting an oversubscription of N350 billion. Another round of OMO has been approved to further reduce excess liquidity.
“Offering N108.1bn worth of Treasury Bills with three tenors to the investing public, which can help reduce liquidity in the banking system and support government fundraising. Removal of the cap on the remunerable Standing Deposit Facility to increase activity in the SDF window and manage liquidity.
“Sustained Cash Reserve Requirement debits, which have moderated liquidity in September and October 2023. Liquidity in the entire banking sector has been significantly reduced to under N100 billion in November. Inauguration of a new liquidity management committee within the Bank that meets daily at 8 a.m. to assess liquidity conditions and ensure optimal levels. These measures have already started to yield results, as excess liquidity in the banking system has significantly reduced and the Overnight Bank Borrowing rate has increased to a level consistent with the monetary policy program. Month-on-month inflation has also begun to decline, with a growth rate of 0.67 per cent in October compared to 0.97 per cent previously.”
cc: Punch Ng
