Business

IMF Warns CBN, Others Over Rising Inflation

Published

3 years ago

March 5, 2023

The International Monetary Fund has urged the Central Bank of Nigeria and other monetary authorities to deemphasise monetary policy as a way of tackling the resurgence of inflation.

In a new report titled “Rethinking monetary policy in a changing world,” the Washington-based lender said the ability of central banks to set monetary policy and control the economy in more fraught times hinges on its independence.

According to the report, the low-interest rates and less extreme public debt levels that prevailed after the global crisis of 2008 permitted central banks to ignore what were then relatively inconsequential interactions between monetary and fiscal policy.

However, during the COVID-19 crisis, circumstances changed dramatically, and government spending rose sharply in many economies, the report stated.

It noted that as spending was increasing, countries were hit by supply shocks of unprecedented proportion, largely the result of pandemic-related problems—such as supply chain disruptions, which added to inflation pressures.

The report read in part, “The pandemic demonstrated that monetary policy does not always control inflation on its own. Fiscal policy also plays a role. More importantly, the accompanying buildup of public debt raised the possibility of fiscal dominance—in which public deficits do not respond to monetary policy.

“Whereas low debt levels and the need for stimulus allowed monetary and fiscal authorities to act in tandem following the global financial crisis, the prospect of fiscal dominance now threatens to pit them against one another.”

Noting that the central bank’s position may come into conflict with the government’s desires, the IMF said central banks could retain independence only if they promise not to accede to any government desires to monetise excessive debt, which would then force authorities to cut spending or increase taxes, or both—so-called fiscal consolidation.

“Most important, the central bank must keep public opinion on its side, because the public is the ultimate source of its power and independence. That means the central bank should effectively communicate the rationale for its actions to retain public support, especially in the face of fiscally driven inflation.

“A central bank ultimately maintains its dominance if it is able to credibly promise that it will not bail out the government by monetising public debt if there is a default,” the report read further.

Business

Fourteen Nigerian Banks Yet To Meet CBN’s Recapitalisation Ahead Of Deadline

Published

5 hours ago

November 27, 2025

Editor

No fewer than 14 Nigerian commercial banks are yet to meet the Central Bank of Nigeria’s recapitalisation requirement as the 31st March 2026 deadline inches closer.

This follows CBN Governor, Olayemi Cardoso’s announcement on Tuesday that sixteen Nigerian banks have met their recapitalisation requirement ahead of the apex bank’s March 2026 deadline.

DAILY POST reports that Cardoso disclosed this in a statement after the bank’s 303rd Monetary Policy Committee in Abuja.

According to Cardoso, the development indicates that there is financial soundness in the country’s financial banking system.

MPC had been urged by banks to ensure a successful implementation of the recapitalisation process.

“The committee noted with satisfaction the sustained resilience of the banking system, with most financial soundness indicators remaining within regulatory thresholds,” Cardoso said.

“Acknowledged the substantial progress in the ongoing recapitalisation programme, with 16 banks achieving full compliance with the revised capital requirements.

“The committee thus urged the Bank to ensure a successful implementation and conclusion of the programme, among other domestic developments,” Cardoso said.

This means that two additional Nigerian banks have been added to the list of banks which have complied with the apex bank recapitalisation requirement in the last two months.

Recall that Cardoso, in the 302nd MPC meeting, announced that only fourteen banks have met the recapitalisation requirement.

CBN records as of 2024 showed that the country has thirteen commercial banks, five merchant banks and seven financial holdings companies.

Earlier, a report emerged that Access Bank, Zenith Bank, GTBank, Wema Bank, Jaiz Bank, Stanbic IBTC, and others have already met CBN’s recapitalisation requirement.

CBN in March directed commercial banks with international authorisation to increase their capital base to N500 billion, while those with national licences must raise to N200 billion.

Business

CBN Retains Interest Rate At 27%

Published

2 days ago

November 25, 2025

Editor

The Monetary Policy Committee of the Central Bank of Nigeria has voted to retain the benchmark interest rate at 27 per cent.

CBN Governor, Olayemi Cardoso, announced the decision on Tuesday following the apex bank’s 303rd MPC meeting in Abuja.

Cardoso stated that the committee also resolved to keep all other monetary policy indicators unchanged.

He noted that the Cash Reserve Ratio (CRR) remains at 45 per cent for commercial banks and 16 per cent for merchant banks, while the 75 per cent CRR on non-TSA public sector deposits was equally maintained.

Cardoso added that the Liquidity Ratio was retained at 30 per cent, and the Standing Facilities Corridor was adjusted to +50/-450 basis points around the Monetary Policy Rate.

The decision comes as Nigeria records its seventh consecutive month of declining inflation, which eased to 16.05 per cent in September 2025.

Business

CBN Issues Directive Clarifying Holding Companies’ Minimum Capital

Published

3 days ago

November 24, 2025

Editor

The Central Bank of Nigeria, CBN, has issued a definitive directive detailing how financial holding companies should calculate their minimum paid-up capital, following weeks of confusion that delayed the release of some banks’ half-year and nine-month financial statements.

In a circular dated November 14, 2025, the apex bank acknowledged “divergent interpretations” of the term minimum paid-up capital as stated in Section 7.1 of the 2014 Guidelines for Licensing and Regulation of Financial Holding Companies.

To eliminate ambiguity, the CBN ruled that minimum paid-up capital must be computed strictly as the par value of issued shares plus any share premium arising from their issuance.

“All Financial Holding Companies are required to apply this definition in computing their minimum capital requirement—without exception for subsidiaries,” the circular stated.

The regulator added that the directive takes immediate effect, noting that any previous interpretation that does not align with the new clarification “should be discontinued forthwith.”

The move is expected to calm market anxiety and provide clarity for lenders navigating ongoing regulatory capital requirements.