Your monetary policy agenda disastrous, CBN Governor Emefiele warns Atiku

*Cautions banks against violation of money laundering Act

Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has warned that floating the naira would be disastrous to the nation’s economy.
Emefiele said this during the monetary policy committee (MPC) meeting of the apex bank in Abuja.

In November 2018, Atiku Abubakar, presidential candidate of the Peoples Democratic Party (PDP), had said it was worth the risk to float the naira even if it results in inflation, adding that any side effect would be balanced out by attracting more inflow of foreign currency.

But speaking on Tuesday, the CBN governor said adopting such a policy would be as good as going back to the “era of Structural Adjustment Programme (SAP)”.

“The MPC reviewed it and concluded that it would be wrong. It is as good as saying that we should go back to the era of Structural Adjustment Programme (SAP) in Nigeria,” he said.

“The implication can better be imagined. It will certainly lead to capital flight, lead to massive depreciation or devaluation of the currency and ultimately to currency crisis in Nigeria and I think we should all know that it is a road to perdition to ever go in that direction.”

The CBN governor also dismissed insinuations about the existence of a capital control regime in the country.

He said although the CBN is completely apolitical in its activities as an independent institution, it would not hesitate to respond to economic issues within its purview.

“There is no capital control in Nigeria today because you cannot find the CBN trying to intervene in the market for demand and supply of foreign exchange,” he said.

“We cannot be talking about allowing import of items that can be produced in the country today, exporting jobs from Nigeria to foreign countries, and we say we have the interest of Nigeria at heart? We don’t agree with anybody. It is a wrong premise to say that you will allow imports to just flood the country just because you want to please anybody. It is not in our interest.

“We will remain apolitical. We will not want anybody to drag the central bank into issues that are within our remit, otherwise we would respond to it.”

CBN Warns Banks against Violation of Money Laundering Act

The Central Bank of Nigeria (CBN) also warned Deposit Money Banks (DMBs) to guard against violation of the Money Laundering Act, as various political parties gear up towards the 2019 elections.

This is coming as the CBN’s Monetary Policy Meeting (MPC), for 14 unbroken times, retained the Monetary Policy Rate (MPR) otherwise known as lending rate at 14 per cent.

The apex bank said the banks that violate the Money Laundering Act under the guise of handling money for politicians risk stiff sanctions.

Speaking Tuesday at the end of the Monetary Policy Committee (MPC) meeting in Abuja, the CBN Governor, Mr. Godwin Emefiele, said the apex bank’s position has been handed down to chief executives of the banks earlier, adding that he has also intimated them of the likely dangers they might be exposed to as a result of the activities of politicians.

He said, “On the 2019 elections, we had a meeting with the banks. We advised them to be very careful of money laundry issues. If they are caught, they will be heavily penalised. But banks have their rules and criteria; I don’t think banks will do anything that will violate the rules. When they go wrong, we will deal with them.”

Emefiele, who also spoke on lending to politicians, added: “of course, when you see banks lending to politicians, they have their acceptance criteria and I don’t think they will do that at this time.”

According to him, “everybody must have learnt their lessons and I believe that the right thing for all is to conduct their businesses carefully. But we as central bank, we are staying behind and watching to make sure that when things go wrong or about to go wrong, we will deal with it appropriately.”

On the controversial MTN repatriation issue, Emefiele pleaded with journalists to give all the parties some time to tidy up loose ends.
He said, “We have held meetings with the MTN Group from South Africa and we are at the verge of announcing the resolution. I am very certain that we have reached the end of the road on this issue, and I will continue to say that the sanctity of the CCI issued by our banks remain sacrosanct.

“No other company or persons are being investigated on the issue of CCI, this is an isolated matter and I will also say that we have foreign investors in Nigeria like Nigerian Breweries, Guinness and lots more who have been carrying out their businesses for over 50 years and they have conducted their businesses in a way that we instructed, and that is why there have not been issues,” he said.

According to him, the MTN issue “is being resolved and there is no need for anybody to be worried.

This issue will be resolved equitably and amicably for the benefit of all.

“You must know that in issues like these, there are several things involved, such as whether the capital repatriation of CCI was issued in 24 hours, and several others. These issues were dealt with over the period but the one that appears to have generated the kind of attention that we think it shouldn’t be generating is the issue of repatriation,” he stated.

Meanwhile, the MPC, for 14 unbroken times, Thursday retained the Monetary Policy Rate (MPR) otherwise known as lending rate at 14 per cent.

The committee also retained the Cash Reserve Ratio (CRR) and Liquidity Ratio at 22.5 per cent and 30 per cent respectively, as well as the asymmetric corridor at +200 and -500 basis points around the MPR.