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Central Bank of Nigeria, Federal Ministry of Finance, should ensure exchange rate stability -Kyari Bukar

02/04/2014 13:29
The Central Bank of Nigeria (CBN) and the Federal Ministry of Finance have been urged to collaborate to ensure price and exchange rate stability in the country.
Kyari Bukar, Managing Director, Central Securities Clearing System (CSCS), stressed this on Wednesday in Lagos.
According to him, the two agencies should as a matter of necessity, collaborate to achieve their objectives of stabilising the economy.
The two institutions, he said, should be ready to check the likely effects of high spending that could arise from electioneering period,  which according to him was customary in a democratic dispensation.
He said, "The high spendings could trigger imbalance in the economy; when you spend, you open up a kind of war because there will be more money in the system.
"It was because of this that the CBN and the Monetary Policy Committee (MPC)  raised the Cash Reserve Ratio (CRR) from 12 per cent to 15 per cent in March.
"The purpose of the increase in CRR was to mop up money from the system.
"The decision will have made the CBN to withdraw between N350 billion or N400 billion from circulation.
"The decision tightened liquidity in the system,  making it difficult for Nigerians and institutions to use such funds on other things."
He added that the withdrawal would lessen the pressure on the naira.
''There is spending galore that is coming into the system. So, the MPC had to quickly take a watchful eye on the price rate and exchange rate,'' he said.

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