We’ll continue to monitor the banks — Emefiele

The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, in this interview with journalists shortly after the Monetary Policy Committee meeting, speaks on issues affecting the economy;IFEANYI ONUBA was there

How much was moved out of the banking sector as a result of the implementation of the Treasury Single Account policy?

There has been a lot of speculation in the market about the amount that needed to be moved from the money banks to the CBN through the Treasury Single Account. The truth is that the amount that was moved was less than what has been speculated in the media. The TSA is an ongoing exercise. The amount at the CBN as of September 15 is less than what has been reported. The amount keeps growing. A lot of people had predicted that maybe a lot of liquidity squeeze has been created as a result of this.

The data that the committee reviews between Tuesday and Wednesday showed that the liquidity ratio indeed increased moderately. That is why the committee came up with the conclusion that the impact of the movement of funds from the banks to the CBN on liquidity is sort of moderate.

How safe are Nigerian banks in the light of the movement of funds as a result of the TSA?

My deputy said last week that Nigerian banks are among the most regulated banks in the world. That is very correct. The liquidity ratio that we saw based on data that were presented to us showed that Nigerian banks are safe and that Nigerian banks are very strong, and we will continue to monitor their liquidity from time to time to ensure that they do not slide into a difficult terrain.

What has been the impact so far of the new foreign exchange restriction policy on the economy?

What has happened is that 41 items were excluded from accessing foreign exchange from the CBN and other official channels and the parallel market. However, please note that the CBN does not have the power to ban those items from being imported.

So, the impact, as far as we are concerned, is positive because we began to see people who, before now, have closed their factories as a result of the non-competitiveness of their products compared to the prices of imported items, now opening shop and employing more people thereby boosting the business in the environment. In fact, there was a tomato company that shortly after the announcement of the foreign exchange exclusion on the items advertised for about a thousand jobs.

Just like we have seen, there are many other companies abroad which have seen that it would be difficult for them to continue to produce in their countries and export those items to Nigeria. They have started considering the possibility of shipping their machines to Nigeria so that they can begin to produce those goods in Nigeria. These are the positives of the policy.

I must confess that no doubt there may be initial pains to the people, but we are optimistic that in due time, the pains will be relieved. The exclusion of the products from sourcing foreign exchange as far as we are concerned creates opportunities for our jobless youths to begin to see this as an opportunity for them to jump into the market and various industries and begin to fill the gap that has been created due to the restriction of these items in Nigeria.

It will help the country create employment and boost industrialisation. That is why we will work to see how the CBN and the banks, being financial catalysts in the financial system, must do their best to see how they can work towards channelling available liquidity to support targeted sectors in the economy.

Here, we are talking about the real sectors like the manufacturing sector and some of those industries that have become moribund as a result of the fact that their products have become uncompetitive. Also, the agriculture sector, especially in areas like rice, maize and cassava farming, will substantially boost the growth of our Gross Domestic Product.

Is the Central Bank now reviewing its position following the removal of Nigeria from the JPMorgan index?

Basically, what we have said is that we have done the 22 per cent adjustment; we looked at the possibility of whether supply can continue to be boosted and we are in the mood where what we are doing now is to see whether we can conserve our reserves and make the exchange rate stable; but at the same time see what we can do to manage the structure of our demand for foreign exchange.

Hence, for this reason, we decided to exclude some of these items that we know can be produced locally. We are currently in that mood and we are very much optimistic that in due course, by the time we are able to achieve some moderation in demand for the importation of these items, it should be possible for us to return to the index.

We will continue to make sure that those decisions we took will continue to impact positively on the lives of our people. And we are committed to it. We will try as much as possible to play our part as the monetary authority to do our best to continue to engender growth and create employment for our people so that we can continue to see economic growth and development in Nigeria.

To what extent has the monitoring of the Bureau De Change be effective following the introduction of the Bank Verification Number scheme to that segment of the financial market?

The process of effective monitoring of the BDCs and indeed other players in the foreign exchange market is an ongoing process. The BVN issue for the monitoring has just commenced and the registration process will be ending by the end of October, and after then, we will be reviewing the process and begin to take up the next step.

There have been reports that some government agencies such as the Nigerian National Petroleum Corporation and others were exempted from the TSA. What are the reasons for the exemption?

Well, the truth is that I have not seen any memo that exempts any MDA from the TSA. So, as a result, I will advise all those who think they have been exempted to please avoid creating confusion because I have not seen any memo; and for that reason, no organisation is exempted. I will appeal to those who are affected by the TSA to please continue to comply with the movement of accounts from other banks to the CBN.

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