Leadership (Abuja)
Justus Nduwugwe
4 November 2009
Abuja — The Central Bank of that there is about N500billion gap between the levels of the current monetary aggregates and the benchmark evels for 2009, assuring that there will be a quantity easing to bridge the gap.
This is coming against the backdrop of the revelation that "as at October 30, 2009, foreign reserves are provisionally estimated to be US$43.05billion," down from the US$43.34billion level as at end of September, 2009.
Making these known at the conclusion of the Monetary Policy Committee (MPC) meeting at the CBN headquarters in Abuja, the CBN governor, Dr. Sanusi Lamido Sanusi, revealed that the modalities for quantitative easing include investments in bonds to be issued by Asset Management Company (AMC).
He however added that the setting up of the AMC is subject to the approval of the National Assembly.
Other modalities, he said, include the redemption of promissory notes issued by the Federal Ministry of Finance as well as the CBN, in connection with the retirement of debt and liabilities arising from purchase and assumption of failed banks.
The communiqué issued at the end of the meeting also indicated that the Monetary Policy Rate (MPR) will remain unchanged for the remaining quarter of the year at 6 per cent, but an asymmetric corridor of interest rates around the MPR is introduced.
"The rate on the standing lending facility will remain at 200 basis points above the MPR, while the rate on the standing deposit facility will be 400 basis points below the MPR,", the apex bank also decided.
Besides, with effect from November 16, 2009, the temporary ban placed by the CBN on the use of Bankers' Acceptances and Commercial Papers will be lifted, while the guidelines will be issued by the bank prior to that date.
Meanwhile, the CBN Governor tasked the National Assembly to make laws aimed at preventing corporate prostitution in particular and exploitation of women in general.
In response to a question on the issue, Sanusi said: "It is a society where women are vulnerable and exploited. And they can't even report because they know that nothing will happen. It is a national problem. CBN has written and warned banks not to do it. We should begin to ask questions on the legal sanctions necessary to stop women exploitation". The National Assembly, he said, should be taken to task to make the necessary laws to tackle this national shame.
In another development, the Governor assured that the CBN would ensure that shareholders' interests are protected in the troubled banks, arguing that the recourse to the law courts by the shareholders was unnecessary.
He said in part, "when we engaged the EFCC to help in recovering the debts from debtors, it is not for the CBN.
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