Regulatory policy

Emefiele provides guidance on monetary policy stance for economic growth

CBN Governor, Godwin Emefiele
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July 16 (THEWILL) – About a week away from the bi-monthly session of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), CBN Governor Godwin Emefiele has hinted at key considerations that would influence the rate- decision of the body responsible for stimulating the economy.

In line with the strategic direction of the apex bank, Emefiele also disclosed that the MPC will chart a new course for improved monetary policy and a CBN that will provide direction to monetary policy in Nigeria.

The Governor said this during a Monetary Policy Committee, MPC, Strategic Retreat at Lakowe, Ibeju-Lekki in Lagos on Friday.

The retreat is themed “Monetary Policy Implementation in a Digitally Changing Developing Economy”.

Mr. Emefiele said that technology and innovation played a major role in the growth of output and economic development in Nigeria, hence the need to explore new ways of adapting monetary policy tools to improve the contribution of technology and innovations to the growth equation.

He said monetary policy has been seriously challenged as its policy space has narrowed significantly, in some cases paradoxically and necessitating the need to rethink monetary policy in the context of emerging challenges and economic transformation.

“I therefore welcome our choice of the theme of this retreat “Monetary Policy Implementation in a Digitally Changing Developing Economy”.

“The evolution of FinTechs, cryptocurrencies, digital payments, artificial intelligence and machine learning has changed the way the financial and banking sectors operate, both globally and nationally.

“Therefore, the urgent call for the need to rethink financial system regulation, supervision and implementation of monetary policy,” the CBN Governor said.

According to Mr. Emefiele, while innovations carry many risks and uncertainties for the sectors, they also present many benefits for positive economic transformation, especially financial inclusion which has been the main catalyst for inclusive growth, poverty reduction and job creation.

The Governor also said that the apex bank has championed the principle of financial inclusion to achieve the Sustainable Development Goals, SDGs, including the recent launch of eNaira.

He said that since its launch, a large unbanked population has been captured in the formal sectors, saying this has also improved the effectiveness of monetary policy and positively impacted the better living standards of the people.

Mr Emefiele said the relevance of central banking and monetary policy in the digital ecosystem is sometimes questioned, as regulatory oversight functions are largely eroded or weakened by the inability of traditional tools to perform these functions. .

He said: “In order to ensure the relevance of monetary policy and the role of monetary authorities in the new digital world, MPC members must engage with an advanced level understanding of the interaction of digitalization with the objectives, targets and tools of monetary policy.

Mr. Emefiele said the purpose of the retreat was to carry out a self-assessment of the performance of the committee for four years after the last retreat was held and to reflect on new methods to meet the growing challenges facing the formulation and the implementation of monetary policy in Nigeria.

“First, the purpose of this is to do a self-assessment to tell us how we have performed in light of the challenges we have faced over the past three to four years after the last retreat.

“How did we manage to implement some of these decisions that we made in this retreat, and then we start telling ourselves again if we haven’t done well.”