CBN announces measures to limit impact of coronavirus

16 Mar 2020
Financial Nigeria


The policy measures include extension of moratorium on loans, interest rate reduction and creation of a N50 billion fund.

Godwin Emefiele, Governor, Central Bank of Nigeria

The Central Bank of Nigeria (CBN) has announced six policy measures to limit the economic fallout of the coronavirus (COVID-19) outbreak in the country. Last week, the World Health Organization (WHO) declared the novel infectious disease, which has spread to 158 countries and territories, a pandemic.

The coronavirus outbreak has weighed heavily on business activities and caused a panic in global financial markets. Oil prices have crashed to their lowest levels in four years. A coronavirus-induced global recession is expected to occur in the first half of 2020.

The six policy measures, which the apex bank announced at a press briefing today, are i) extension of moratorium on loans; ii) interest rate reduction; iii) creation of a N50 billion fund; iv) credit support for healthcare sector; v) regulatory forbearance; and vi) strengthening of loan-to-deposit rate policy.

“CBN grants Deposit Money Banks (DMBs) leave to consider temporary and time-limited restructuring of tenor and loan terms for businesses in oil and gas, agriculture, manufacturing and households affected by outbreak of COVID-19,” the CBN said in  a statement on Twitter. “The CBN stands ready to provide liquidity backstops as and when required in view of its role as Banker to the Federal Government and lender of last resort.”

Governor of the CBN, Godwin Emefiele, pledged the bank’s support in ensuring that DMBs maintain their capacity to direct credit to individuals. He also urged banks to continue to build capital buffers to improve the resilience of the banking sector.

Earlier today, Managing Director of International Monetary Fund (IMF), Kristalina Georgieva, stated three areas for coordinated action to stabilize the global economy, one of which is monetary policy. The others are fiscal stimulus and regulatory response.

As at 4:20pm local time in Nigeria, there were 174,965 coronavirus cases globally and 6,687 fatalities, according to Worldometer. Nigeria became the first sub-Saharan African country to report a COVID-19 case on February 27.  

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