Emefiele Allays Banks’ Liquidity Fears Over TSA Implementation

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There is palpable tension in Nigeria’s banking industry over the implementation of the Treasury Single Account (TSA). However, the Central Bank Governor Mr Godwin Emefiele has urged banks in the country not to panic.

In an interview with Reuters yesterday, the CBN boss gave an assurance that he was ready to inject liquidity if needed into the interbank market.

The Federal Government had directed all banks to move all the accounts of government parastatals into a Treasury Single Account at the central bank as part of President Muhammadu Buhari’s drive to fight corruption.

“There is no shortage of liquidity,” Emefiele said, pointing to an oversubscribed sale of treasury bills on Wednesday”. He also said less than one trillion naira ($5 billion) would be moved into the single account but did not give details.

The CBN governor also reiterated his resolve not to devalue the naira.

“There will not be a devaluation of the naira because right now the currency is appropriately priced,” he said.

In a series of unconventional interventions to protect the naira, the bank has blocked access to foreign currency to import items ranging from soap and toothpicks to cement and private jets. Emefiele said the list of restricted items could be expanded to encourage local production even as he rejected claims by Nigerian firms about the difficulties of getting hold of dollars.

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