To ensure that the weak economy of Nigeria is not further affected by the financial rigors emanating from Wall street, the Central Bank of Nigeria yesterday pumped in a staggering $1.5 billion into the country’s circulation to bolster its stability.
Reports have claimed that the persisting global financial turmoil had driven the Nigerian government to this initiative. After the collapse of the fourth largest US investment bank, the Lehman Brothers, there has been speculations that the liquidation of America’s Lehman Brothers Bank will affect Nigeria’s economy. With Egypt and South Africa already affected, Nigeria has moved to prevent any adverse effect the financial crisis ùight have on its economy.
Despite Financial experts claiming the World financial crisis will have no effect on the Nigerian economy, the government has refused to lay on its back. Group Managing Director of the Access Bank Aigoje Aig-Imoukhuede doubted if the foreign investments would have any effect on the Nigerian economy and Dr. Obadia Mailafia, an economist also argued in the same direction that the fall of the bank would not affect Nigeria in the short run.
CBN Governor Professor Chukwuma Soludo said after an emergency Monetary Policy Committee meeting that the MPC has reduced the liquidity ratio from 40% to 30%; to allow repo transactions against eligible securities for 90 days, 180 and 360 days. Finally, CBN will now buy, and sell securities through the two-way quotes. Nigeria cannot afford to be unmindful of the international financial developments. The economic fundamentals remain very strong and the impact of the global financial tumult is expected to be limited.
Nigerians are, however, pleased with the government’s initiatives to guard against any probable economic quagmire.