The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, announced plans for a significant liquidity boost to Nigeria’s financial sector. Cardoso revealed during a press briefing after the 297th Monetary Policy Committee (MPC) meeting that the apex bank would inject N1.4 trillion into the banking system over the next three months to address liquidity challenges and improve cash availability across the country.
The liquidity injection is part of the CBN’s efforts to ensure that cash remains readily available within the banking sector, addressing complaints about cash shortages, particularly at Automated Teller Machines (ATMs). Cardoso emphasized that the apex bank is actively addressing these issues and that the cash infusion is a major step towards resolving them.
“Another N1.4 trillion is likely to be delivered in another three months to aid the whole process of cash within the system,” Cardoso said during the press conference. He assured that this strategic move is designed to significantly improve liquidity, allowing banks to have better cash distribution systems to meet the demands of their customers.
Cardoso also issued a firm warning to Nigerian banks, cautioning that those found sabotaging efforts to improve liquidity will face serious consequences. He emphasized that it is essential for all stakeholders to cooperate in ensuring that cash circulates as intended.
“If they are not compliant, there will be sanctions. But I believe that at the stage we are in now, everybody realizes that stakeholders must play their part in ensuring that cash gets to the desired places they are intended to be,” Cardoso added.
This liquidity intervention comes as the CBN continues to implement tight monetary policies aimed at curbing inflation and stabilizing the economy. During the MPC meeting, the committee announced a hike in the country’s benchmark interest rate from 26.75% in July 2024 to 27.25%, signaling its ongoing commitment to fighting inflation, which currently stands at over 32%.
While the increase in the Monetary Policy Rate (MPR) is designed to temper inflation by reducing excess liquidity in the economy, the planned injection of N1.4 trillion aims to maintain a balance by providing enough cash for daily transactions and economic activities.
Since his appointment as CBN governor, Olayemi Cardoso has made a concerted effort to introduce reforms aimed at addressing key challenges in Nigeria’s financial system. His leadership has focused on improving liquidity management, tightening monetary policies to control inflation, and addressing the operational inefficiencies in Nigerian banks.
The decision to inject N1.4 trillion into the banking system reflects Cardoso’s proactive approach to ensuring that the financial sector is resilient and capable of supporting economic recovery. By maintaining strong oversight and enforcing compliance with regulations, the CBN, under his leadership, continues to strive for stability in Nigeria’s financial sector.
cardoso’s office has focused on decisive actions to stabilize Nigeria’s economy in the face of ongoing challenges. The upcoming N1.4 trillion liquidity injection will test whether these efforts can address cash shortages and broader economic issues, particularly inflation and public confidence.
The Nigerian banking sector and the broader economy are expected to benefit from these measures, which should improve cash flow, reduce the strain on ATMs, and boost public confidence in the financial system. With the CBN governor’s clear mandate to ensure cash availability and enforce compliance, the financial sector is poised to experience positive change.
