Sections
Poll: Budget distortion
Do you support the moves by Presidency through the Supreme Court to prevent the National Assembly from distorting 2009 budget?
Banks’ credit to private sector hit all-time high
Font size:
In the last quarter of 2007, banks credit to the private sector reached an all-time high of 96 percent, which is unprecedented in Nigeria’s credit market history.
On the contrary, banks credit to the public sector dipped all through the period under review.
In the third quarter of 2007, banking system’s credit to the private sector rose by 20.6 percent to N4.1574 trillion, compared with the increase of 14.8 and 11.6 percent in the preceding quarter and corresponding period of 2006, respectively.
The rise in the review quarter reflected the 21.5 percent increase in deposit money banks’ (DMBs) claims on the core private sector.
Also in the third quarter, banking system’s credit (net) to the Federal Government managed a 11.7 percent to N2.752trillion, contrasting the 14.2 per cent decline in second quarter of 2007.
According to Chukwuma Soludo, governor Central Bank of Nigeria (CBN) in a communiqué to the Monetary Policy Committee (MPC) of the CBN which met on February 5, 2008, the outlook for 2008 while being positive has many elements of uncertainty.
Meanwhile, the inter-bank call money market rate increased slightly in December 2007, and January 2008, following the upward review of the Monetary Policy Rate (MPR) at the 201 meeting of the MPC which held on 4th December, 2007. The MPR is retained at 9.5 per cent.
The MPC noted that the domestic macroeconomic environment was stable in 2007 despite tight conditions in the global financial markets engendered by major adverse financial developments like the United States sub-prime market crisis.
Also, MPC observed with satisfaction the sustained single–digit inflation rate throughout the year and the orderly functioning of the foreign exchange and domestic financial markets.
On the national currency, the Naira, the committee noted that the naira appreciation has been on account of the sustained foreign exchange inflows engendered by the favourable macroeconomic environment and the investment climate as well as high rates of return in domestic financial markets.
And on the monetary aggregates, MPC noted that over the end- December 2006 level, provisional figures indicated that broad money (M2) grew by 30.68 percent in 2007.
“The growth in M2 was driven by the increase in foreign assets (net) of the banking system as well as the rise in credit to the private sector.”
While the Committee expressed concern about the rapid growth of M2, it noted with relief that this did not translate to higher inflation during the year, partly on account of improved supply conditions.
In the third quarter of 2007, banking system’s credit to the private sector rose by 20.6 percent to N4.1574 trillion, compared with the increase of 14.8 and 11.6 percent in the preceding quarter and corresponding period of 2006, respectively.
The rise in the review quarter reflected the 21.5 percent increase in deposit money banks’ (DMBs) claims on the core private sector.
Also in the third quarter, banking system’s credit (net) to the Federal Government managed a 11.7 percent to N2.752trillion, contrasting the 14.2 per cent decline in second quarter of 2007.
According to Chukwuma Soludo, governor Central Bank of Nigeria (CBN) in a communiqué to the Monetary Policy Committee (MPC) of the CBN which met on February 5, 2008, the outlook for 2008 while being positive has many elements of uncertainty.
Meanwhile, the inter-bank call money market rate increased slightly in December 2007, and January 2008, following the upward review of the Monetary Policy Rate (MPR) at the 201 meeting of the MPC which held on 4th December, 2007. The MPR is retained at 9.5 per cent.
The MPC noted that the domestic macroeconomic environment was stable in 2007 despite tight conditions in the global financial markets engendered by major adverse financial developments like the United States sub-prime market crisis.
Also, MPC observed with satisfaction the sustained single–digit inflation rate throughout the year and the orderly functioning of the foreign exchange and domestic financial markets.
On the national currency, the Naira, the committee noted that the naira appreciation has been on account of the sustained foreign exchange inflows engendered by the favourable macroeconomic environment and the investment climate as well as high rates of return in domestic financial markets.
And on the monetary aggregates, MPC noted that over the end- December 2006 level, provisional figures indicated that broad money (M2) grew by 30.68 percent in 2007.
“The growth in M2 was driven by the increase in foreign assets (net) of the banking system as well as the rise in credit to the private sector.”
While the Committee expressed concern about the rapid growth of M2, it noted with relief that this did not translate to higher inflation during the year, partly on account of improved supply conditions.
Add to:
del.icio.us |
Digg
del.icio.us |
Digg
Email to a friend
Print version
Plain textRate this article
Comments ( posted):
Post your comment