CBN directs AMCON to reduce debt by N1trn

… Retains MPR at 12%

FROM ISAAC ANUMIHE, ABUJA

The Central Bank of Nigeria (CBN) has directed  the Assets Management Corporation of Nigeria (AMCON) to redeem its bonds for cancellation by exchanging them for Federal Government  Treasury Bills in its books and to  reduce its debt by N1 trillion in December 2013.

The directive comes as the Monetary Policy Committee retained the Monetary Policy Rate (MPR) at 12 per cent at the end of yesterday’s meeting.

Speaking after the   92nd  MPC meeting in Abuja, CBN governor, Mallam Sanusi Lamido Sanusi, said that  the only impact of the  repayment is that the balance sheet of AMCON (and the contingent liability on the FGN from its guarantee of AMCON Bonds) will shrink by N1 trillion.

This, he said,  was positive for the economy and the credit rating of the FGN and the banking industry.

“Its impact on the markets will be minimal given that only AMCON’s balance sheet is affected significantly and AMCON is not a player in these markets” he said.

Besides, CBN said it is targeting inflation rate of between  6 and 9 per cent  in  2014, since 2014 will witness heavy spendings because of the 2015 general election. He assured that with the tight   monetary policy to be  put in place  in 2014, the Nigerian economy will witness a single digit inflation.

Sanusi stressed that tightening of the monetary policy would continue in the new year, stating  that in 2014 like in the previous years. Agriculture sector would continue to be the main booster of the non oil sector, while there will be a moderation in the Consumer Price Inflation.

According to him,  the inflationary trends in 2013, witnessed a moderation in consumer price inflation, which began in the fourth quarter of 2012, and continued in the third quarter of 2013.

“The year-on-year headline inflation moderated to 7.8 per cent in October 2013 from 8.0 per cent in September. Also, food inflation declined to 9.2 per cent in October from 9.4 per cent in September 2013. Core inflation, however, rose to 7.6 per cent in October 2013 from 7.4 per cent in September.” Sanusi, noted.

 

The post CBN directs AMCON to reduce debt by N1trn appeared first on The Sun News.

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