Emefiele gave the Nigerian people assurances that the problem would be quickly resolved as he spoke at the conclusion of the two-day monetary policy committee meeting in Abuja on Tuesday.
According to him, the apex’s bank payment platform management department made attempts to guarantee that leisure time on online banking services is addressed following a terrible time experienced by Nigerians through their mobile applications, USSD platforms, and debit cards since the execution of the naira redesign policy and subsequent cash shortage.
“We need to apologize. Online channels do in fact fail. But no doubt it is a result of the deluge of the volume of internet transactions that slammed the banking industry. But I think it is currently being resolved,” Emefiele said.
“Our payments system management section keeps an eye on the online payment platforms every day to make sure that any outages are immediately fixed so that business may continue as usual.”
The CBN chief also addressed the nation’s money supply during the briefing, noting that the execution of the naira redesign strategy has led to a decline of currency outside of banks.
He praised fintech for easing the burden on traditional banks and facilitating easy transactions for Nigerians.
The CBN governor stated that prior to the naira redesign, there was approximately N3.23 trillion in circulation, of which only N500 billion was held in the banking system and N2.73 trillion was outside the banking system.
“It was published yesterday that currency in circulation is close to N1 trillion. CBN will continue to pump the newly redesigned currency into the market.
“The truth is that at some point we will need to reassess to know whether the currency in circulation has attained an optimal level so as to put in place measures to ensure that we don’t go back to where we have before where people kept money outside the banking system for their own benefits,” he added.
According to him, the conflict between Russia and Ukraine has persisted unabatedly, putting significant strain on the commodities and energy markets due to supply chain bottlenecks. In addition, the risk of the resurgence of several Coronavirus variants has persisted since China abandoned its Zero-COVID policy.
The CBN governor said that the MPC meeting concentrated not only on the inflationary trends in the majority of the major nations but also on the reported impact of policy rate hikes: intended to rein in inflation on financial system stability in the international financial system.
According to him, the committee consequently discussed the recent bank failures in the US and Switzerland, an occurrence that followed the US’s ongoing interest rate hikes, and how this had negatively affected the vast portfolio of US banks.
The MPC noted that whereas the MPR was increased by 500 basis points in Nigeria, from 12.5 percent in 2022 to 17.5 percent in January 2023, the Economic Soundness Indicators (FSIs) in Nigeria show that the Nigerian banking industry continues to thrive due largely to the stringent prudential guidelines put in place by the CBN which has resulted in a strong build-up of not only the Cash Reserve Ratio (CRR) in Nigeria but also the Cash Ratio and Capital Adequacy Ratio.
Emefiele stated that the committee was relieved that its numerous actions to raise MPR have had a relatively small impact on inflation, given that the rate appears to have plateaued in Nigeria, in light of these strong FSIs.
According to him, the MPC’s main concerns during the meeting were therefore developing crucial policy measures to protect the economy against impending shocks from the global economy and maintaining its focus on domestic price stability.
He said loosening, in the view of members, would gravely undermine the gains achieved so far.
“The MPC observed the continued upward risk to price development around expectations on the removal of the PMS subsidy; rising prices of other energy sources; continuing exchange rate pressure; and uncertain climatic conditions,” the official said.
These, in the opinion of the members, present a strong case for an increase in the policy rate, albeit one that is less drastic.
‘The Committee, however, noted that the naira redesign and cash withdrawal limit policies have resulted in a sizeable reduction in Currency-Outside-Banks, indicating an expected improvement in the potency of monetary policy tools.