otukpo:

Am still thinking of how this policy is gonna work.

sulad82i:

Since you know so much about democracy and free market, given the situation CBN is trying to curtail and or introduce, what will you have done if you have the chance to make a decision? What will you advice someone in the CBN president's position about how to handle the situation?

[b]We’ve not set limit on lodgment, withdrawal –CBN
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Written by Gbola Subair and Adekunle Tayo
Wednesday, 25 May 2011

THE governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, has clarified the controversy over the recent policy on lodgment and withdrawal expected to commence in June 2012.

Mallam Sanusi disclosed this on Tuesday shortly after the Monetary Policy Committee (MPC) meeting held in Abuja.

The CBN governor, speaking on the bank’s recent policy on cash lodgement and withdrawal, disclosed that the policy, which is expected to commence in June 2012, had come to stay.

Stating that the CBN had not put a limit on the amount of money a customer can withdraw or lodge in a bank, Mallam Sanusi said what the policy said was that there would be a cost to the customer who lodges or withdraw more than the specified limit in a day.

Besides this, Mallam Sanusi said the N150,000 withdrawal or saving limit was just a working document, saying that Nigerians had up to 12 months to discuss it and arrive at a reasonable cash limit.

Sanusi, disclosing that only eight per cent of bank customers withdraw more than N150,000 daily, said he could not understand the furore generated by the policy when such people made use of credit card, internet and telephone banking when they were abroad.

The apex bank governor, who said the CBN spent N200 billion to print and burn old naira notes, as the case may be on annual basis, said the new cash withdrawal policy would make the Nigerian economy a cashless one and eliminate money laundering, as much as possible.

On inflation, the governor noted that the year-on-year inflation rate declined to 11.3 per cent in April 2011 while food inflation also declined to 10.7 per cent in April from 12.2 per cent in March and February 2011 respectively.

However, Mallam Sanusi disclosed that core inflation of 12.9 per cent in April was slightly higher than the 12.8 per cent in March 2011.

Following the enhanced liquidity in the banking system occasioned by the use of the AMCON bonds to secure funds and the impact of the new reserve averaging policy, the CBN boss said interbank rate and OBB rates softened with the OBB recording a low 6.90 per cent on May 9, 2011.

Mallam Sanusi also noted that retail lending remained relatively high with the spread between the maximum lending rate and the consolidated deposit rate widening slightly to 19.64 per cent in April 2011 from 19.57 per cent points in March.

He said the foreign exchange market remained relatively stable owing to a deliberate policy on the part of the CBN to increase supply to the market to maintain the exchange rate within a band of plus or minus three percentage points, complemented by funding from autonomous sources.

At the wholesale Dutch Auction System (wDAS), Mallam Sanusi said the naira/dollar exchange rate opened at N152.63/US$ and closed at N154.63/US$ on May 18, 2011, representing a slight depreciation of 1.38 per cent or N2.11K.

Mallam Sanusi disclosed that in the light of the state of the economy, it would be prudent to adopt a monetary policy that was consistent with the need to address inflationary expectations associated with excessive liquidity and pressure on foreign exchange market.

To actualise these objectives, the CBN boss said the members of the committee (9:1) voted in favour of further tightening of the monetary policy by increasing the Cash Reserve Requirement (CRR), from two per cent to four per cent with effect from June 8, 2011 to align with the next reserve averaging maintenance period.

The CRR is the proportion of bank deposits which must be kept in cash with the apex bank. The CRR is currently two per cent and is usually determined on a simple average of banks’ daily deposit base, according to a new framework issued recently.

The governor also disclosed that six members voted in favour of 50 basis point increase in the Monetary Policy Rate (MPR) from 7.5 per cent to eight per cent, three voted for 25 basis-point increase while one voted for no change.[/b]

Stating that the CBN had not put a limit on the amount of money a customer can withdraw or lodge in a bank, Mallam Sanusi said what the policy said was that there would be a cost to the customer who lodges or withdraw more than the specified limit in a day.

Sanusi, disclosing that only eight per cent of bank customers withdraw more than N150,000 daily, said he could not understand the furore generated by the policy when such people made use of credit card, internet and telephone banking when they were abroad.

enyojo:

^^ With all due respect Mr Seun, I do not think not withdrawing more than N150k in a day will harm any Nigerian.

denzel2009:

What are you saying exactly?