CBN REDUCES MONEY IN CIRCULATION

The Central Bank of Nigeria on Tuesday accused Deposit Money Banks of not lending to the economy.

This, it said, forced it to reduce the money in the banking system to minimise the upward movement in Monetary Policy Rate.

The CBN Governor, Mr. Lamido Sanusi, said this shortly after the Monetary Policy Committee meeting held at the apex bank’s headquarters in Abuja.

He said Tuesday’s decision was the most difficult in recent times owing to various choices confronting the committee.

He said rather than lend to the real economy, the banks had continued to take advantage of high yields on government securities to direct credit away from the core private sector.

The liquidity of banks, he noted, had provided an opportunity for speculative activity in the foreign exchange market.