- As CBN retain rates
- Currency in Circulation moderates to N3.29trn
Banks’ credit to the private sector rose Month-On-Month (MoM) by 4.23 per cent to N36.9 trillion last month from N35.4 trillion in January 2022.
However, currency in circulation fell MoM by 0.27 per cent to N3.29 trillion from N3.25 trillion in January 2022.
Data from the Central Bank of Nigeria (CBN’s) Money and Credit Statistics released yesterday showed that net domestic credit also rose MoM by 4.2 per cent to N51.8 trillion in February 2022 from N49.7 trillion in January 2022, signifying an uptick in economic activities.
Similarly, net credit to the government increased MoM by 4.2 per cent to N14.9 trillion in February 2022 from N14.3 trillion in January 2022.
In the communiqué issued after the latest CBN’s Monetary Policy Committee (MPC) meeting, the committee indicated that the banking sector has sustained resilience, evidenced by the further moderation of Non-Performing Loans (NPLs) to 4.84 per cent in February 2022 from 4.90 per cent in December 2021.
In overall, members of the MPC expressed confidence in the CBN’s regulatory regime and commitment to maintaining stability in the banking system, urging the management to sustain its tight regulatory surveillance.
Meanwhile, at the end of its meeting, the Committee voted to retain the MPR at 11.5 per cent; the asymmetric corridor of +100/-700 basis points around the MPR; the CRR at 27.5 per cent; and Retain the Liquidity Ratio at 30 per cent.
Godwin Emefiele, the CBN Governor, said the MPC in its consideration as to whether to hold, tighten, or loosen, remained concerned that the global situation on rising prices may continue in the near term but may begin to moderate if deliberate and urgent actions are taken by both the monetary and fiscal authorities to correct the rising inflation.
He said: “On another hand, Committee was satisfied that the use of the Bank discretionary CRR policy should be deployed more aggressively to control the level of money supply in the economy.
“On tightening in order to rein in the rising price level, MPC was of the view that given the fragile state of the current GDP growth and the potential external and domestic headwinds from the Russia-Ukraine war, a contractionary policy stance would stifle the expected investment expansion needed to drive growth and absorb the shocks in Nigeria.
“MPC also feels that not only would tightening reverse the steady improvement recorded in credit expansion, it is also of the view that tightening would not necessarily tame the inflation, particularly where the marginal decline is relatively not yet sustainable.”
