Nigeria: Senate Committee Urges CBN to Address Inflation

Senate Committee Urges CBN to Address Inflation
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During a retreat with the Nigeria Deposit Insurance Corporation (NDIC) in Lagos, the Senate Committee on Banking, Insurance & other Financial Institutions emphasized the importance of the Central Bank of Nigeria (CBN) taking measures to control inflation in the country.

The committee chairman highlighted recent actions by the CBN, including the issuance of circulars limiting banks’ net operating positions and addressing outstanding obligations known as forwards, which have contributed to some strengthening of the naira in recent days.

Acknowledging these efforts, he stressed the need for the CBN to focus on curbing inflation as a priority, noting that moderating inflation would have a ripple effect on other economic indicators such as interest rates and exchange rates.

He stated, “Our primary concern should be on addressing inflation in the country. Once inflation is moderated, other economic indicators such as interest rates and exchange rates will follow suit. Therefore, it is imperative for us to prioritize measures to control inflation.”

Regarding the yet-to-be-constituted Monetary Policy Committee (MPC), which is scheduled to meet later in the month, the committee chairman expressed confidence that the members would be announced before the scheduled meeting date.

Meanwhile, the NDIC revealed its collaboration with the CBN to enhance supervision of banks, particularly in light of the current economic challenges.

The Managing Director of NDIC emphasized the implementation of measures to ensure the robustness of banks’ assets and to maintain the non-performing loans (NPLs) ratio below the maximum set by the CBN.

He stated, “We are working closely with the CBN to intensify surveillance during this period to ensure that banks’ asset quality remains strong. The focus is on preventing any deterioration in asset quality and maintaining the safety and soundness of banks.”

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