Just eliminate the numerous exchange rates; I'm no economist and dont understand a single thing in that whole report. But it seems the numerous exchange rates is what every investor and economist has been fingering as the problem.

What's the effect of this on the common man

agabusta:


Emefiele is scared to his marrows, he doesn't want to try any more skills that may just make things worse off.

He just wants to play cool as you said and hope a miracle happens.

You and I know how difficult it is for that miracle to happen in this country.

The central bank is cut in a tight corner here theoretically : any reduction in interest rate would increase inflation rate.The economy would stabilize temporarily when oil prices go up.But in the long run we need superstars to run the monetary and fiscal policy section of the economy, not commercial bankers

In summary, the MPC decided to:
(i) Retain the MPR at 14 per cent
(ii) Retain the CRR at 22.5 per cent
(iii) Retain the Liquidity Ratio at 30.00 per cent and
(iv) Retain the Asymmetric corridor at +200 and -500 basis points around the MPR


What is the purpose of the meeting if nothing is going to change.

jinxet2000:
If in summary, retain all these, why hold the meeting and why write this long epistle?

I wonder o!

Epistle According to Emefiele...

obayaya:


Maintain Status quo and hope for the best?

#Gamble as Usual

That's the right course for now

I don't understand why these experts always resort to basing their decision on what advanced economies are doing?

For God's sake, Nigeria is on another pedestal.. What works in these countries doesn't always work in Nigeria.

Nigeria is classified among the Emerging / Frontier Market Index, so we need to actually learn from the developed market. They didn't become developed overnight!

[s]

ernie4life:
1
CENTRAL BANK OF NIGERIA
COMMUNIQUÉ NO 111 OF THE
MONETARY POLICY COMMITTEE
MEETING OF 23RD AND 24TH JANUARY
2017

1.0.

Background
The Monetary Policy Committee held its first statutory meeting of fiscal 2017 on 23rd and 24thJanuary, 2017 against the backdrop of increased uncertainty arising from political and economic developments around the world. Over the last few weeks the pillars of the old order - free trade, multilateralism and globalization have come under intense pressure, and seemingly giving way to an era of enlightened national interest in the conduct of international economic relations. On the domestic front, the economy remains in recession and inflation pressures have yet to recede. Both external and domestic conditions have blended to significantly complicate the policy environment.
In attendance at the meeting were all 10 members of the Committee. The Committee reviewed the global and domestic economic and financial environments in 2016 and the outlook for the short to medium term in 2017.

External Developments

The uncertainty in the external environment persisted owing to a combination of recent political and economic developments. The key issues include: Brexit, the rising wave of populist and anti-globalization sentiments anchored by emerging bilateralism, divergent monetary policy stance of the advanced central banks and disorderly commodity price movements. With global output growth improving sluggishly, the outlook for 2017 remains unchanged owing to persisting uncertainties in commodity prices and volatility in the financial markets as well as slowing demand in the advanced economies and the emerging markets.

The MPC welcomed the modest increase in oil prices following the last OPEC decision to cut output and noted the increase in the policy rate of the US Federal Reserve Bank in December 2016 and the potential implications of that decision for international interest rates and capital flows. While noting the materiality of the output cut on oil prices, the Committee cautioned that the effect could rapidly wane, given the likelihood of a supply glut from non-OPEC members, low level of global economic activity and weak growth. Emerging markets and developing economies, in particular, have continued to confront strong head winds such as low commodity prices, rising inflation, currency instability, intractable low aggregate demand and subdued capital flows.

Overall, the Committee noted that whereas improved commodity prices may provide modest tailwinds for resource dependent economies in 2017, the medium-term outlook continues to be muffled by stagnation and uncertainty in the prospects for global trade, subdued investment and heightened policy uncertainty, especially in some major economies. Nevertheless, the IMF estimates that these constraints would decline; paving way for mild improvements in economic growth from 3.1 per cent in 2016 to 3.4 per cent in 2017. Global inflation commenced a moderate but steady rise on the backdrop of improvements in oil prices and currency depreciation in several emerging markets. However, amongst the major advanced economies, only the U.S Fed has commenced policy tightening1 while the Bank of Japan (BOJ), the Bank of
1
The Federal Reserve raised its benchmark Federal Fund rate by 25 basis points in December 2016, to a range of 0.50 to 0.75 per cent, and also provided indication of rate hikes in 2017
England and the European Central Bank, all retained their accommodative policy stance at their most recent meetings. Domestic Output Developments Data released by the National Bureau of Statistics (NBS) in November 2016 showed that the economy contracted further by 2.24 per cent in Q3 2016, having slipped into recession following another contraction in output in Q2,2016. Although the overall contraction in Q3 was greater than was observed in Q1 and Q2, the non-oil sector grew by 0.03 per cent in Q3, driven mainly by agriculture, which grew by 4.54 per cent.


The Committee is of the view that the key undercurrents i.e. scarcity of foreign exchange, low fiscal activity, high energy prices and the accumulation of salary arrears - cannot be directly ameliorated by monetary policy actions. The Committee hopes that the recent increase in oil prices would be complemented by production gains to provide the needed tailwinds to sustainable economic activity.
In that regard, the Committee commends the commitment of the fiscal authorities to step up efforts to fill the aggregate demand gap through a speedy resolution of the domestic indebtedness of the federal government to states and local contractors. The Committee believes that doing so will aid the effort towards economic recovery.


Developments in Money and Prices The committee noted that money supply (M2) grew by 19.02 per cent in 2016, being 8.0 percentage points higher than its programmed limit. It underscored the necessity of keeping the economy adequately lubricated in the face of declining output. Growth in Net Domestic Credit (NDC) was 24.79 per cent at end- December 2016, being 17.94 per cent above its provisional benchmark for 2016. Likewise growth in net credit to government, at 58.84 per cent, surpassed its programmed target of 47.4 per cent. In effect, all the major monetary aggregates exceeded their programmed provisional benchmarks for fiscal 2016.
Headline inflation (year-on-year) continued to rise, creeping up in December 2016 to 18.55 per cent from 18.48 per cent in November, and 18.33 per cent in October, thus sustaining the upward momentum since January 2016.


The increase in headline inflation in December 2016 was driven by increase in the food component, which inched up from 17.19 per cent in November to 17.39 per cent in December. Core inflation, on the other hand, moderated slightly to 18.05 per cent in December 2016 from 18.24 per cent in November. The Committee observed the increases in the month-on-month inflation rate in November and December, in contrast to successive declines between June and September 2016. It noted that the structural factors driving the sustained pressure on consumer prices, such as the high cost of power and energy, transport, production factors, as well as rising prices of imports are yet to abate. Nonetheless, the Committee estimates that the current policy stance and other measures directed at improving food production would combine with base effect to usher in some moderation in consumer prices in the short to medium term.
Money market interest rates fluctuated in tandem with the level of liquidity in the banking system. Thus, average interbank call rate, which stood at 15.34 per cent on 21st November 2016, closed at 9.90 per cent on December 30, 2016. Between these periods, the interbank call rate averaged 13.59 per cent. The average interbank call rate however, fell to 3.00 per cent on December 9, 2016, due to an increase in net banking sector liquidity to N495.48 billion on December 8, 2016, following the payment of statutory revenue to states and local governments as well as maturity of CBN bills during the period.

The Committee welcomed improvements in the equities segment of the capital market as the All-Share Index (ASI) rose by 2.84 per cent from 25,499.00 on November 21, 2016, to 26,223.54 on January 20, 2016. Similarly, Market Capitalization (MC) increased by 2.5 per cent from N8.80 trillion to 9.02 trillion during the same period. Relative to end- December 2016, the capital market indices, however, fell by 2.04 and 2.05 per cent, respectively, reflecting the challenges confronting the economy.

Total foreign exchange inflows through the CBN increased significantly by 82.45 per cent in December 2016 owing mainly to the increase in oil prices. Total outflows, however, spiked during the same period. The Committee noted that the average naira exchange rate remained stable at the inter-bank segment of the foreign exchange market in the review period.
2.0. Overall Outlook and Risks The medium term outlook based on available data and forecast of key economic variables indicate a more resilient economy in 2017. Growth is expected to turn positive in fiscal 2017, as prior policy lags converge and the fiscal space becomes more accommodative. In addition, the agricultural sector is expected to play a bigger role in driving growth, given the expansion of the Anchor Borrower Program, as well as other developmental initiatives of the Government. Likewise, the prospects for moderation of price developments appear to be strengthening on the heels of positive developments inthe food sub-sector.



The Committee identified the downsiderisks to this outlook to include the possibility of a slower-than-expected rate of global economic activity, fluctuating oil prices and production shut-ins due to vandalism of oil installations.
3.0. Summary of Considerations
The Committee re-assessed the headwinds which confronted the economy in 2016 and the opportunities for recovery in 2017. In particular, the MPC evaluated the implications of the rising wave of nationalistic ideologues across the West, the re-evaluation of trade agreements and the possibility of rapid monetary policy normalization in the United States, with adverse consequences for other countries, including Nigeria. The uncertainties underpinning the implementation of Brexit and the apparent retreat from globalisation and free trade were also important points of reflection.


In recognition of the seemingly inevitable structural shift in the global economy, the Committee reiterated the need to be more inward looking and hasten efforts towards economic diversification to support the domestic economy and improve life for the Nigerian people. Consequently, members acknowledged the imperative of sectoral policies and greater coordination of monetary and fiscal policy.
Conscious of the prevailing market sentiments in favour of a rate cut, the Committee reasoned that most of its decisions in 2016 were informed by the need to address the delicate balance between price stability and growth. Noting that the pressures on consumer prices were yet to abate and even as the economy continued to be in recession despite the intervention support by the


Central Bank, the Committee stressed that it was not oblivious of the full ramifications of the economic challenges facing the country.
The MPC was concerned that the current situation was not amenable to simplistic analyses and quick fixes such as have found expression and increased attention at different fora and the media. The domestic economic challenges which include a chronically import dependent consumption culture, lack of competitiveness of many sectors of the economy and yawning infrastructural gap, have combined with an unfavourable external environment to complicate the macroeconomic policy environment. The Monetary Authority had on many occasions, and to the extent feasible, taken extra-ordinary steps to support other policies as well as compensate for aspects of structural gaps in the economy even at the expense of its core mandate.
The Committee specifically noted the positive contribution of agriculture to GDP in the third quarter, mostly attributable to the Bank’s interventions in the sector.


The Committee hopes that given the thrust of the 2017 budget and accompanying sectoral policies, output growth should resume in the short to medium term. The MPC, therefore, lends its voice to efforts for an early finalization of the 2017 Federal Budget by the authorities concerned, and the resolve to pursue a non-oil driven economy, as these will go a long way in stimulating aggregate demand and restoring confidence in the economy. The Committee also urged the authorities to seriously consider using the Public Private Partnership (PPP) model in its infrastructure development programme as a means of cushioning any possible shocks to budgeted revenue.
The Committee further noted that Inflationary pressures would begin to subside as non-oil output recovers and the naira exchange rate stabilizes. Until then, it stressed, a rate cut would worsen the inflationary conditions and undermine the current outlook for stability in the foreign exchange market.


The Committee also feels that doing so would further aggravate demand pressures while undermining existing income levels in the face of the already expansionary monetary policy and increasing inflationary pressure which will make the economy unattractive for foreign and domestic investment. Given these limitations, the Committee was reluctant to lower the policy rate on this occasion but remained committed to doing so when the conditions permit.
From a financial stability standpoint, the Committee noted the possible impact ofthe inclement macroeconomic environment on banking sector resilience.

The MPC urged the Management of the Bank to engage industry operators to discuss likely issues of asset quality, credit concentration and high foreign exchange exposures.
Given the growth in money supply arising from unconventional monetary policy operations of the Bank and implications for price and exchange rate developments, the Committee is committed to moderating growth in narrow money in the 2017 fiscal year in line with the Bank’s monetary growth benchmarks.


4.0. The Committee’s Decisions
The Committee, in consideration of the headwinds in the domestic economy and the uncertainties in the global environment, decided by a unanimous vote to retain the MPR at 14.0 per cent alongside all other policy parameters.

In summary, the MPC decided to:
(i) Retain the MPR at 14 per cent
(ii) Retain the CRR at 22.5 per cent
(iii) Retain the Liquidity Ratio at 30.00 per cent and
(iv) Retain the Asymmetric corridor at +200 and -500 basis points around the MPR

Thank you for listening.
Godwin I. Emefiele
Governor, Central Bank of Nigeria
24th January, 2017

https://www.cbn.gov.ng/Out/2017/MPD/Central%20Bank%20of%20Nigeria%20Communique%20No%20111%20of%20the%20Monetary%20Policy%20Committee%20Meeting%20of%2023rd%20and%2024th%20January%202017.pdf

[/s]

Man Commits Suicide Live On Facebook After Girlfriend Dumped Him

A 22-year-old heartbroken Turkish man, Erdogan Ceren shot himself live on Facebook in a moment watched by more than five hundred thousand people.
In the shocking footage, Ceren, in the live broadcast on his public Facebook page explained to the camera that his girlfriend had broken up with him and he was going to end his life because of that.
As the video was live, he was bombarded with comments from people appealing to him not to shoot himself. The young man is shirtless in what looks like his bedroom as he presses a shotgun to his chest. He then tells the camera, ‘No one believed when I said I will kill myself, so watch this.‘ and after
http://ghwestcosby..com.ng/2017/01/man-commits-suicide-live-on-facebook.html

davide470:
That's the right course for now


Nigeria is classified among the Emerging / Frontier Market Index, so we need to actually learn from the developed market. They didn't become developed overnight!

I understand the bolded. But when have any policy gleaned from the playbook of these developed countries ever worked here?

From where I stand with my layman understanding of economics and Monetary policy, It just seems like Nigeria is immune to the policies used by these advanced countries.

Cos we've always copied them and it has always failed to yield the desired results here. Why's that so?

ednut1:
98% of nairalanders cannot comprehend dis article

I no go lie,I follow for the 98%, so long an epistle and too much jargons

NNVanguard:
If only we could be more determined, innovative and corruption free, we will soon weather the storm of this recession.

.......If only light can be constant.......

Naijalabel:
Summary

CBN Bans Bitcoins In Nigeria
The central bank of Nigeria has directed all commercial banks to stop any transaction that has to do with virtual currencies, Bitcoins and other E-currencies in Nigeria



http://www.naijalabel.com/2017/01/cbn-bans-bitcoins-in-nigeria.html?m=1

Where is Lady F?

Stop passing information you don't understand. This is just a warning to the public. Banks are not legally authorised to deal on that, but that doesn't mean they shouldn't but at their own risk.

Exchangers are to have KYC and anti-money laundering policy I quote.

"Ensure that existing customers, that are virtual currency exchangers, have effective AML/CFT controls that enable them to comply with customer identification, verification and transaction monitoring requirements;
“Where banks or other financial institutions are not satisfied with the controls put in place by the virtual currency exchangers/customers, the relationship should be discontinued immediately; and any suspicious transactions by these customers should immediately be reported to the Nigerian Financial Intelligence Unit (NFIU).”

The apex bank reiterated that VCs such as Bitcoin, Ripples, Monero, Litecoin, Dogecion, Onecoin, etc. and similar products are not legal tenders in Nigeria, thus any bank or institution that transacts in such business does so at its own risk.”

DokitaDave:

God bless you sir. That was all I came to check.

Please, apart from Access Bank and GTB, do you know any other bank that allows its Naira denominated debit card to be used for international transaction?

your GTB mastercard still work on international platform

mine doesnt work even paypal rejected it!

SUMMARY

1. There is Increase in government spending in 2016
2. The committee cannot reduce interest rate to guide against increase demand for forex which could inturn increase inflation.
3. Increase in agricultural production aided by the anchor borrower scheme of the CBN and increase lending to the sector by Commercial Banks.

nwaanambra1:


your GTB mastercard still work on international platform

mine doesnt work even paypal rejected it!

Yes. But monthly transaction is capped at $100.

Surprised?
They are google economists, bankers and experts.
They copy from the West, hook, line and sinker. No modification

obayaya:


Maintain Status quo and hope for the best?

#Gamble as Usual



I don't understand why these experts always resort to basing their decision on what advanced economies are doing?

For God's sake, Nigeria is on another pedestal.. What works in these countries doesn't always work in Nigeria.

was just looking for MPR .
the sustained rate is good for me.
inter bank lending rate also ok.
but there's tendency of a gain against the dollar on a short run (a gain could mean a sustained status quo against the slide of naira) due to current instability of the US due to changes in polity in the US.

my take

DokitaDave:
Yes. But monthly transaction is capped at $100.

hmmm! ok. thanks.

obayaya:


I understand the bolded. But when have any policy gleaned from the playbook of these developed countries ever worked here?

From where I stand with my layman understanding of economics and Monetary policy, It just seems like Nigeria is immune to the policies used by these advanced countries.

Cos we've always copied them and it has always failed to yield the desired results here. Why's that so?

The truth is, the infrastructure needed to work with these "foreign policies" are not yet in place, so we would have to suffer the short term effect for the long run benefits.

And we are not immune: an increase in the Interest rate in America or BREXIT in UK affects a lot of things down here and other parts of the world.

Btw, forecasts for the Nigerian Economy in 2017 would see us getting out of recession in early Q3, so things would still get better.

davide470:
The truth is, the infrastructure needed to work with these "foreign policies" are not yet in place, so we would have to suffer the short term effect for the long run benefits.

And we are not immune: an increase in the Interest rate in America or BREXIT in UK affects a lot of things down here and other parts of the world.

Btw, forecasts for the Nigerian Economy in 2017 would see us getting out of recession in early Q3, so things would still get better.

I hope so bro..

I just hope so

nwaanambra1:


your GTB mastercard still work on international platform

mine doesnt work even paypal rejected it!

Check the amount of money you have in that account, PayPal rejected mine at first but when I put money in the account it worked perfectly.