Declining Growth Worries CBN

CBN

The Central Bank of Nigeria (CBN) has raised concerns over the continued slow down of the country’s economic growth.

The CBN also said, Wednesday, that the banking system had enough liquidity to take up what foreign investors might sell after JP Morgan removed Nigeria from its bond index.

However, a senior bank official said on Wednesday that the CBN plans to retain foreign currency controls because of concerns about slowing growth.

“We are concerned that we are having declining growth,” Moses Tule, the Central Bank’s monetary policy director, told reporters.

He defended the bank’s decision to impose currency controls to preserve foreign reserves, which fell 23 per cent in the year to Sept. 23, central bank data showed.

“We have to protect the nation before we protect businesses,” Tule told a conference in Lagos where he came under fire from executives complaining the dollar controls were hurting their businesses.

Import duty collections fell 8.8 percent to 650.74 billion naira ($3.3 billion) in the first nine months.

Growth was 2.35 percent in the second quarter year on year, compared with 6.54 in the same quarter of 2014.

Tule said the bank’s decision last week to cut the cash reserve ratio to 25 percent from 31 percent had injected N300 billion into the financial system.

“There’s sufficient liquidity in the Nigerian banking system to take up whatever foreign investors may dump, so we are not disturbed,” he said.

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