Nigerian banks safe, sound despite TSA outflows –CBN

Nigerian banks safe, sound despite TSA outflows –CBN

…As MPR retained at 13%, CRR now 25%

According to Isaac Anumihe, Abuja, Central Bank of Nigeria (CBN) yesterday retained the Monetary Policy Rate (MPR) at 13 per cent and the symmetrical corridor at 200 basis points around the MPR.
This is as it also retained the liquidity ratio at 30 per cent while reducing the Cash Requirement Ratio (CRR) from 31 per cent to 25 per cent.
Speaking after the MPC meeting in Abuja,  the CBN Governor, Mr. Godwin Emefiele,  explained that  the decision was in  consideration of the underlying fundamentals of the economy, particularly the declining output growth, rising unemployment, evolving international economy as well as the need to properly position the economy on a sustainable growth part.
On the Treasury Single Account (TSA), Emefiele assured that Nigerian banks are safe because they are about the most regulated financial institutions in the economy today. He, however, said that CBN would continue to monitor their health and liquidity to ensure that they don’t slide into difficulty.
“The Nigerian banks are about the most regulated banks today. The liquidity ratio shows that Nigerian banks are safe and we will continue to monitor their liquidity from time to time to ensure they do not slide into difficult terrain,” he said.
According to him, there has been a lot of speculations in the market about the amount that needed to be moved from the banks to CBN’s TSA account is not up to the amount expected, saying that the movement is still ongoing.
“The truth is that the amount that has been moved so far is less than the amount that people are quoting on the pages of newspapers. The TSA is an ongoing exercise because the amount in CBN as at September 15 is less than what it is as at today, September 22. The amount keeps growing.
“What we are saying is that a lot of people are predicting that there is a lot of liquidity squeeze created as a result of this. The data that the committee reviewed between yesterday and today show that liquidity ratio increased moderately. So, that is why the committee came up with the conclusion that the impact of the movement of funds from the banks to CBN on liquidity is sort of moderate,” he noted.
But he emphatically explained that no institution has been exempted from the exercise, while appealing to every institution to comply.
“The truth is that as far as I am concerned, I have not seen any memo that exempts any institution from the TSA. So, as a result, I will advice those who think they have been exempted to please avoid creating confusion because I have not seen any and for that reason, no institution has been exempted. I will appeal to those who have been affected by the movement of funds from the bank to the CBN TSA account to please comply.

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