COVID-19: CBN supports economy with ₦8.8tr

The Central Bank of Nigeria (CBN) has spent over ₦8.8 trillion to support the economy since the advent of COVID-19.

CBN Governor, Godwin Emefiele made this disclosure on Monday in Abuja at the end of the of the first Monetary Policy Committee (MPC) meeting for 2021.

Reacting to Fitch rating agency’s criticism of the CBN’s credit to the federal government, Emefiele stated that it is “very unfortunate that fitch which is known to be a first-class company and first-class rating agency will hold such views on what we are doing and therefore pass judgement regarding the size of credit that the CBN has granted to the federal government”.

He defended the bank’s action, insisting that “the CBN is banker to government, second let it be known that the CBN is a lender of last resort not just to government but also even to our banks when they run into short term liquidity problems”.

Using other countries and the European Union as examples of entities that extended credits to their governments, Emefiele revealed that “in Nigeria just 4.5% of the GDP amounting to about $18billion (₦6,822,000,000,000)” was extended as credit to the federal government to address the COVID-19 challenges.

Emefiele said some this money was used to “support measures which included outright purchase of debt by the Central banks in order to improve the ability of fiscal authorities to fund recovery efforts”.

According to Emefiele, “the efforts of the central bank are not different that’s the only thing I can say from what is being witnessed in other climes all over the world as we all share the same objective considering both conventional and unconventional measures that will support faster economic recovery in light of reduced revenue reset been faced by this fiscal recovery authorities”.

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The balance of ₦2trillion Emefiele pointed out was what the bank committed to mitigate the impact of COVID-19.