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UPDATED: CBN announces six initial policy responses to combat Covid-19 scourge on economy
THE Central Bank of Nigeria (CBN) has announced six initial policy measures to contain the impacts of COVID-19 on the Nigerian economy.
Godwin Emefiele, CBN Governor, at an ongoing press briefing on Monday said that the apex bank has approved the extension of the moratorium on loans and also reduction of the interest rate.
He also stated that the apex bank is creating N50 billion fund credit support for the healthcare sector and regulatory forbearance and strengthening of Loan to Deposit Rate (LDR) policy.
According to Emefiele, all intervention loans currently under moratorium have been granted an extension of one year to settle effective from March 1, 2020, while interest rates on all CBN intervention facilities have been reduced from nine to five per cent per annum.
He also confirmed the establishment of a N50 billion credit facility through NIRASAL microfinance bank, which according to him, is majorly for household and Small and Medium Enterprises (SMEs) that have been affected by the COVID-19 outbreak.
The CBN governor explained that beneficiaries of this facility would be hoteliers, airline service providers and health care merchants.
Emefiele stated that intervention facilities and loans would be open to pharmaceutical companies willing to expand or open their drug manufacturing stores in Nigeria, just as he added that this facility is also open to hospitals and healthcare practitioners who intend to expand or build health facilities to first-class centres.
He further said that the CBN would grant all Deposit Money Banks (DMB) leave to consider temporary and time-limited restructuring of the tenor and loan terms for businesses and households that have been affected the most by the impact of COVID-19.
Some of these businesses, he pointed out included oil and gas, agriculture and manufacturing.
While the apex bank is implementing this policy, Emefiele said the overall financial stability of the DMBs would be closely monitored.
The CBN would support industry funding levels to maintain DMB’s capacity to direct credit to individuals, businesses and households, he said.