Cardoso said this on Friday night during his keynote address at the 58th Bankers Dinner of the Chartered Institute of Bankers of Nigeria in Lagos.
“While absolute inflation is still rising, the declining rate of growth indicates progress. The CBN is confident that with continued tightening measures for the next two quarters, we will be able to effectively manage inflation,” he said.
On the backlog of FX being cleared, the Central Bank boss said that the bank’s efforts in the last two months have been yielding results.
He said, “I am happy to report that our efforts over the past two months have begun to yield fruit. The activities include the following: Regular Open Market Operations to mop up excess liquidity from the banking system. An OMO auction was recently held with a top rate of 17.5 per cent for the one-year tenor, attracting an oversubscription of N350 billion. Another round of OMO has been approved to further reduce excess liquidity.
“Offering N108.1bn worth of Treasury Bills with three tenors to the investing public, which can help reduce liquidity in the banking system and support government fundraising. Removal of the cap on the remunerable Standing Deposit Facility to increase activity in the SDF window and manage liquidity.
“Sustained Cash Reserve Requirement debits, which have moderated liquidity in September and October 2023. Liquidity in the entire banking sector has been significantly reduced to under N100 billion in November. Inauguration of a new liquidity management committee within the Bank that meets daily at 8 a.m. to assess liquidity conditions and ensure optimal levels. These measures have already started to yield results, as excess liquidity in the banking system has significantly reduced and the Overnight Bank Borrowing rate has increased to a level consistent with the monetary policy program. Month-on-month inflation has also begun to decline, with a growth rate of 0.67 per cent in October compared to 0.97 per cent previously.”
Corroborating the claims of the CBN governor in his goodwill message at the event, the Chairman of the Body of Banks CEOs, Ebenezer Onyeagwu, said that the apex bank’s efforts had started to yield results.
He said, “This industry is getting stronger than ever. The biggest elephant in the room that people used to talk about is the issue of FX forwards, that elephant has been caged. The elephant has been dissected, the limbs have been cut and we are moving forward to ensure that the issues with FX forwards are resolved in no time.
“Of course, the credit for that goes to the Central Bank. I’m sure those of us who are bank customers, who have exposures under forwards can see the liquidation of the forwards. Indeed in the next few weeks or days, we should be rounding off with the arrangement that would put a permanent end to the foreclosure of the issue of the FX forwards to the credit of the new leadership we have in Central Bank.”
Onyeagwu expressed support for the banking policies of the apex bank.
“We also want to say that the banking community wholeheartedly supports the transformation and initiative of the central bank even though some of the reforms are painful but we believe that we need to endure the pain for a better and greater tomorrow,” he stated.
