Emma Ujah
6 August 2008
THE Central Bank (CBN), yesterday, expressed concern over the rising inflation which currently stands at 12 per cent but said the Monetary Policy Rate should remain at 10.2 5 per cent.
Governor of the CBN, Prof. Chukwuma Soludo, who briefed the press at the end of a meeting of the Monetary Policy Committee in Abuja, also announced that henceforth, banks must publish all their lending rates for each sector of the economy and respective charges, regularly.
According to him, such information must constantly be on their websites and be submitted to the apex bank which would publish a table of all banks' rates, monthly, in the newspapers.
Prof. Soludo said the essence of the policy was "transparency and full disclosure which will engender a healthy competition as well as create a convergence among the banks. We believe this policy will have a positive effect on the interest rate regime.
"At the end of each month, we will publish the rate of each bank and for which sector. We will take it seriously as each MD is expected to sign what each bank sends to us," he said.
The CBN boss flayed the practice of what has become "hidden charges" under which bank customers are made to pay various fees midway into servicing their loans and which they were aware of prior to taking such loans.
"We are not prescribing what they (banks) will charge but we are saying, make full disclosure of what is being charged," the governor stressed, adding that the new policy was aimed at creating an atmosphere of trust between banks and their customers and that customers would be able to make informed decisions about which bank to take what loan from.
Prof. Soludo said the single-digit target was now a far cry as, according to him, with 18 per cent inflation on food prices and high liquidity, measured by an above budgetary target broad money growth, there were indications that the double-digit inflation rate could persist for the rest of the year.
He said the nation's foreign reserve stood at $60.1 billion as at the end of July and explained that there had been much appreciation in reserve position in recent months because, according to him, it was an indication of the in and outflow of foreign exchange.
Asked what rate interests were being paid on the reserve by the various banks holding custody of it, Prof Soludo said the banks paid prevailing market rates but that but maintained that the key issue was its security.
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