25 Nov

Daily Watch – CBN reduces interest rates, FRC warns of state shutdown within 6 months

  • The CBN, has announced a reduction in the Monetary Policy rate and Cash Reserve ratio to 11% and 20% respectively. The Cash Reserve Ratio (CRR) was reduced from 25% to 20%. The Central bank also broadened its interest rate corridor to 200 basis points above the benchmark rate, and 700 basis points below, Governor Emefiele said. This means the regulator will borrow from commercial lenders at 4% and lend to them at 13%.
  • The Chairman, Fiscal Responsibility Commission (FRC), Victor Murako, has warned of a possible shut-down by some states of the federation in the next six months unless they find creative ways of handling their dwindling allocations from the Federation Account. Murako, who spoke at the opening of a two-day study tour of the FRC by officials of the Ebonyi Fiscal Responsibility Commission in Abuja on Monday, expressed shock that the Nigerian Governors’ Forum had declared that the states could no longer meet the payment of the minimum wage of N18,000 per month. The FRC boss said many states were dishonest about their level of indebtedness, adding they were much more indebted than the governors were willing to admit in public.
  • INEC, has asked the APC to pick a new candidate as replacement for the late Abubakar Audu in order to continue with supplementary election. Audu died just as INEC was collating the results of the November 21 election, in which he was leading. In a statement signed by the secretary to the commission, Augusta Ogakwu, INEC announced it would allow the conclusion of the election process by conducting supplementary election in the remaining 91 polling units where election was cancelled. The supplementary election will hold December 5.
  • Crude oil prices continued at a six and a half year low on Tuesday, as OPEC basket price fell to $38.18 per barrel, one of its lowest since 2009. The basket price, which is calculated as an average of 12 crude oil variants sold by OPEC members fell from $38.37 per barrel on Friday to $38.18 on Monday, OPEC said on Tuesday. Oil prices initially hit a 6-year-low on November 18, when it sold for $38.04, but rose to $38.52 the following day, before it crashed to another low on Monday. The last time the crude oil sold as low as that was in February 2009 when the prices crashed to $38.10 per barrel.