CBN’s new guidelines to combat Naira depreciation and achieve exchange rate stability
The Central Bank of Nigeria, CBN Governor, Emi Cardoso, has said that the Central Bank of Nigeria will soon introduce new foreign exchange laws and guidelines to combat the depreciation of the Naira and achieve exchange rate stability.
He said the CBN would also implement a new recapitalization exercise for the banking industry by directing banks to increase their minimum capital base to a level sufficient to support the $1 trillion economy vision.
Cardoso also revealed that the CBN will introduce a new licensing framework for fintechs and payment banks, warning that operators found engaging in unlicensed activities will face sanctions. did.
Cardoso said the apex bank will further tighten money supply over the next two quarters, citing the need to curb the challenge of rising inflation.
He added that to further reduce surplus cash in the banking system, the CBN management has approved a re-implementation of the liquidity sweep through the issuance of Open Market Operations (OMO) Treasury Bills soon.
He said, “Our monetary policy will reduce interest rates to achieve price stability, promote sustainable economic growth, stabilize the naira exchange rate, and encourage borrowing and investment in the real sector.” I aim to do so.”
“Clear, transparent and harmonized rules governing market operations are essential to ensure the proper functioning of domestic and foreign exchange markets.”
“New foreign exchange guidelines and legislation will be developed and extensive consultation will be held with banks and foreign exchange market operators before introducing new requirements.
“Given policy imperatives and projected economic growth, it is critical for us to assess the suitability of the banking industry to serve the envisaged larger economy. What is being shown has already been established, so it is not just about the stability of the financial system at this point.
“But we have to ask ourselves: Are Nigerian banks adequately capitalized for the needs of a financial system serving a $1 trillion economy in the near future?”
“In my opinion, the answer is ‘no’ unless we take action. So we have to make difficult decisions regarding capital adequacy. As a first step, we will “I will direct them to increase their capital,” he said.
Source: dailypost.ng