Godwin Emefiele, CBN governorThe Central Bank of Nigeria (CBN) will raise a total of N1.22 trillion from sale of treasury bills between December 17, 2015 and the first quarter of 2016. This would be by selling N245.77 billion worth of 91-day bills and N238.51 billion worth of 182-day paper between December 17 this year and March 3, 2016 as well as N735.54 billion worth of 364-day treasury bills in the same first quarter of next year.

The sale of the treasury bills, according to the Monetary Policy Committee of the CBN, is meant to achieve price stability in the economy and keep inflation in check.

Broad money supply (M2) in the country contracted by 3.75 per cent in October, 2015, over the level at end-December, 2014. Also, annualised M2 declined by 4.5 per cent, which was significantly below the growth benchmark of 15.24 per cent for 2015.

Net domestic credit (NDC) grew by 10.8per cent, which annualises to 12.96 per cent in the same period. At this level, NDC fell below the provisional benchmark of 29.30 per cent for 2015. Growth in aggregate credit reflected mainly growth in net credit to the federal government which grew by 96.66 per cent in October, although lower than the 142.38 per cent in September, 2015.

“The MPC considered that although, headline inflation had remained at the borderline of single digit, the observed moderation, especially in the month-on-month inflation, provided some room for monetary easing to support output in the short to medium term, while keeping in focus the primacy of price stability. In effect, the committee will continue to monitor developments around the Naira exchange rate, interest rates, and consumer prices, even as targeted measures are needed to channel liquidity to the key sectors of the economy.

“The committee noted with satisfaction the stability, soundness and resilience of the banking system even against adverse global financial conditions. Given the situation, the MPC emphasised the necessity of focusing on financial market stability and proactive engagement of policy and administrative levers needed to support the environment in which market institutions operate. On their part, market institutions are encouraged to employ more stringent criteria in evaluating their portfolio and business decisions,” the committee had stated.

By Dike Onwuamaeze

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