On secret recordings and monetary policy

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First of all, a disclaimer. I am not a fan of espionage in real life. In books and television shows it can be exciting but in real life it can be a bit unnerving, and probably illegal. It’s not great really. Earlier in the week there were reports of all WhatsApp users being vulnerable to malware that basically granted the attacker access to everything on your phone. Cueglobal paranoia. I don’t have anything particularly incriminating on my phone, but I still got a bit paranoid. Imagine if your private conversations were published for the world to hear. Long and short, I don’t approve anyone being secretly recorded.

 

Secondly, you don’t need to be a fan of conspiracy theories to know that the timing of the release of the recording was not accidental. A purportedly damaging recording released shortly after the governor was nominated for a second term and before his confirmation at the senate? He obviously has some very powerful friends who were not happy with his reappointment. Friends who were fortunately not smart enough to actually know what was going on in the recordings. News flash: there was no N500bn theft being covered up. All disclaimers aside, the recordings shed some light on what was, and still continues to be, problems with the central banks monetary policy strategy.

 

Monetary policy over the last five years has been almost solely focused on one thing: managing the exchange rate. After the central bank abandoned its attempt to maintain an exchange rate of N199 per US dollar by force, it changed strategy towards a more “flexible” exchange rate system with investors allowed to buy and sell dollars on a willing buyer willing seller basis. However, to entice investors to bring foreign currency to Nigeria it … Read More...

CBN urges CIBN to strengthen commitment in enhancing bankers’ professionalism

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The Central Bank of Nigeria (CBN) on Thursday night urged the Chartered Institute of Bankers of Nigeria (CIBN) to strengthen its commitment in enhancing the level and standards of professional in the banking sector.

Aishah Ahmad, deputy governor, financial systems stability directorate, said this after she was conferred with an honorary fellow award by the CIBN.

The CIBN on Thursday at its extra ordinary fellowship investiture formally conferred its honorary fellowship awards on six distinguished bankers in recognition of their contributions to the banking industry and the economy.

Others who were conferred with the same award were  Edward Adamu, deputy governor, corporate services, Peter Amangbo, managing director/CEO, Zenith Bank plc, Tony Okpanachi, managing director/CEO, Development Bank of Nigeria (DBN), Agbaje Segun, managing director/CEO, GTBank plc, Hassan Usman, managing director/CEO Jaiz Bank plc, and Bade Adeshina, Chairman, Goldfield Group.

“I am honoured like other honourees to be conferred with this fellowship, the responsibility is for us to conduct ourselves both in our personal and professional life to these high standards, to be role models and mentors to other professionals in the banking industry and also to support the Institute in its broad activities in terms of building capacity of bankers and their professionalism”, Ahmad said.

Aigboje Aig-Imoukhuede, chairman of Coronation Capital Nigeria limited, while speaking on the “Ethical Dilemma in Financial Institutions: The Way Forward”, told bankers to develop strong moral standard to deal with ethical dilemma.

Choosing the right part when faced with an ethical dilemma is not easy. He charged the participants to begin to ensuring that Nigerian banking profession resolve ethical dilemma in a way that contribute positively to building a great nation.

Aig-Imoukhuede who was the guest speaker at the CIBN extra ordinary investiture said the role of the banker has grown Read More...

IMF asks policy makers to consider Central Banks digital currencies

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The International Monetary Fund (IMF) said on Thursday that Central Bank Digital Currencies (CBDC) is one of the significant issues deserving consideration by policy makers.

Digital currency is a type of currency available in digital form. It can be used to purchase goods and services but can also be restricted to certain online communities.

This is coming as the Fund said less than one-quarter of central banks around the world are actively exploring the possibility of issuing CBDC and that so far, only four pilot projects have been reported.

Tobias Adrian, Financial Counsellor and Director of the Monetary and Capital Markets Department, IMF, stated this in his remarks titled, ‘Paving the Way for Fintech’, on Thursday in Belize City, Belize.

“Despite the challenge of achieving the right balance, every country — including the countries of the Caribbean — would be wise to prepare for and embrace the fintech revolution, in the hope of realizing its far-reaching social and economic benefits”, Adrian said.

“It seems clear that the case for CBDC adoption depends on country-specific circumstances. There doesn’t seem to be a “one size fits all” policy prescription.”

The Central Bank of Nigeria (CBN) on February 28, 2018 warned members of the public that virtual currencies are not legal tender in Nigeria

“We wish to caution all and sundry on the risks inherent in such activities”, Isaac Okorafor, director, corporate communications said.

Further to the circular issued by the Central Bank of Nigeria (CBN) on January 12, 2017, to Banks and other financial institutions on virtual currency operations in Nigeria, the Bank reiterated that cryptocurrencies such as Bitcoin, Ripples, Monero, Litecoin, Dogecoin, Onecoin, etc and Exchanges such as NairaEx are not licensed or regulated by the CBN.

There are surely some positive aspects of adopting CBDC, … Read More...

UPDATE1: Senate confirms Emefiele’s reappointment as CBN Gov

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The Senate has approved the renewal of the appointment of Godwin Emefiele as Governor of the Central Bank of Nigeria (CBN).
The confirmation followed the adoption of the report of the Senate Committee on Banking, Insurance and other Financial Institutions on Thursday plenary.
With this development, Emefiele becomes the fourth governor of the apex bank since 1999 and the first to have his appointment renewed as CBN boss in the last two decades.
His predecessors are: Joseph Sanusi, who served from May 29, 1999 to May 29, 2004; Charles Soludo (May 29, 2004 to May 28, 2009) and Sanusi Lamido Sanusi (June 4, 2009 to June 2, 2014).
In a letter read on the floor of the Senate last Thursday, President Muhammadu Buhari had asked the Senate to confirm the reappointment of Emefiele as Governor of the apex bank for a second and final term of five years.
On Tuesday, Senate President Bukola Saraki referred the matter to the Committee on Banking, Insurance and other Financial Institutions.
He was screened by the panel on Wednesday.
Presenting his report on Thursday, Chairman of the committee, Rafiu Ibrahim (PDP, Kwara) said Emefiele performed creditably well in his first tenure as CBN Governor.
He commended Emefiele for the “maintenance of stable interest rate and effective management of our foreign exchange regime. He also initiated and established several policies and programmes which have positive effect on the economy”.

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CBN begins process of developing PSV2030 for next 10 years

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The Central Bank of Nigeria (CBN) on Wednesday commenced the process of developing the Payments System Vision (PSV) 2030 strategy document, which will define the strategic agenda for Nigerian payment system for the next 10 years.

Consequently, the CBN, in circular signed by Sam Okojere, director, payments system management department, request for information from deposit money banks, Other Financial Institutions (OFIs) and Payment Service Providers (PSPs) to provide information on the proposed PSV2030 initiative.

Since 2006, CBN has published two strategy roadmaps, Payments System Vision (PSV2020), that have created a robust and well-utilised payments environment. The payments industry is currently experiencing radical change internationally and in many countries domestically.

Innovation and competition are being driven by deployment and adoption of new technology solutions and encouragement for new entrants through new regulatory regimes.

“The two previous releases of PSV2020 have largely achieved their objectives. Now is the time to create a new agenda for the payments system in Nigeria – Payments System Vision 2030 – one that defines a framework for the next ten years”, the CBN said in the circular.

“Given the current rapid pace of change, we are seeking the views of a wide range of industry stakeholders and experts. Our PSV2030 framework must recognise the swiftly evolving user requirements, technical solutions, regulatory environments and external threats that typify the industry”.

The creation of PSV2030 comprises three main phases, in the following order –  Phase 1 – Scope and Consult – during this current phase, the CBN said it has produced this scope document and is currently seeking input from current and potential stakeholders, both nationally and from other countries.

Phase 2 – Design and Plan – the information received from Phase 1 will be used to develop the Payments Framework that will Read More...