Tame inflation, Senate committee tells CBN

Senate Committee on Banking, Insurance & other Financial Institutions has urged the Central Bank of Nigeria to tame inflation in the country.

The chairman of the committee said this on Saturday at a retreat with the Nigeria Deposit Insurance Corporation in Lagos.

He said, “If you follow what has been happening, particularly from the end of the CBN, you have seen a draft of circulars, which have come into play. I’m sure you are mindful of the limit that they have brought to the net operating position of banks and the fact that they have validated the outstanding obligations that people refer to as forwards and of course in the last couple of days, there are some gains, some strengthening of the naira.

“My sense of that is they should give them a bit of time. Most of the policy decisions that we are beginning to see, we believe hopefully, will help us moderate the depreciating value of the currency, but I must also mention that what is most critical that we expect is for them to focus on how to tame or moderate inflation.

“Once you moderate inflation, I’m sure the other price indices, i.e. interest rate or exchange rate, will moderate along with what you do to inflation. So, we must focus our attention on the inflation index in the country.”

On the yet-to-be-constituted Monetary Policy Committee, which is expected to meet this month, Abiru expressed confidence that with a date fixed for the meeting already, the members would be unveiled.

“Well, to the extent that we know that it will be held on February 26, clearly the members will emerge before the day. I want you to just believe what the CBN has said,” he said.

Meanwhile, NDIC disclosed that it was collaborating with the central bank to supervise banks, especially with the weak economy.

The Managing Director of NDIC, Bello Hassan, said “There are lots of measures that are being put in place to ensure that we heighten our surveillance during this period, so that the quality of the banks’ assets remains very robust.

“As we speak now, the NPLs ratio is below the maximum ratio set by the CBN and we want to ensure that we stay within that limit. Various measures are being put in place to heighten supervision so that we don’t run into a situation whereby the quality of assets would deteriorate in the banking system. This is to ensure that the banks remain safe and sound.”

The NDIC is the agency empowered by to protect depositors of deposit-taking financial institutions. The NDIC provides incentives for sound risk management in the Nigerian banking system as well as contributes to the stability of the financial system.

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