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CENTRAL BANK OF NIGERIA - cbn.gov.ng

JANUARY, 2018 CENTRAL BANK OF NIGERIAM onetary, Credit, Foreign Trade and Exchange Policy Guidelines For Fiscal Years 2018/2019(MONETARY POLICY CIRCULAR NO. 42) TABLE OF CONTENTSiiiCentral Bank of NIGERIA | January 2018 Monetary, Credit, Foreign Trade and Exchange Guidelines for Fiscal Years 2018/2019 SECTION ONE INTRODUCTION .. 1 SECTION TWO REVIEW OF THE POLICY ENVIRONMENT AND MACROECO- NOMIC DEVELOPMENTS IN 2017 .. 3 The Policy Environment .. Domestic Macroeconomic Developments .. Policy Challenges.

JANUARY, 2018 CENTRAL BANK OF NIGERIA Monetary, Credit, Foreign Trade and Exchange Policy Guidelines For Fiscal Years 2018/2019 (MONETARY POLICY …

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1 JANUARY, 2018 CENTRAL BANK OF NIGERIAM onetary, Credit, Foreign Trade and Exchange Policy Guidelines For Fiscal Years 2018/2019(MONETARY POLICY CIRCULAR NO. 42) TABLE OF CONTENTSiiiCentral Bank of NIGERIA | January 2018 Monetary, Credit, Foreign Trade and Exchange Guidelines for Fiscal Years 2018/2019 SECTION ONE INTRODUCTION .. 1 SECTION TWO REVIEW OF THE POLICY ENVIRONMENT AND MACROECO- NOMIC DEVELOPMENTS IN 2017 .. 3 The Policy Environment .. Domestic Macroeconomic Developments .. Policy Challenges.

2 7 Outlook for the Domestic Economy in 2018/2019 .. SECTION THREE MONETARY AND CREDIT POLICY MEASURES FOR 2018/2019 11 Objectives and Strategy of Policy .. Policy Measures .. Open Market Operations .. 12 Reserve Requirements .. Cash Reserve Requirement .. 13 Liquidity Ratio .. 13 Net Open Position .. 13 Net Foreign Currency Trading Position .. 14 Foreign Exchange Interventions .. Discount Window Operations .. Intra-day Liquidity Facility .. Non-Interest Financial Products.

3 CBN Safe Custody Account .. 16 CBN Non-Interest Note .. CBN Non-Interest Asset Backed Securities .. 16 Funding for Liquidity Facility .. ivCentral Bank of NIGERIA | January 2018 Monetary, Credit, Foreign Trade and Exchange Guidelines for Fiscal Years 2018/2019 Intra-day Facility .. 17 Interest Rate Policy .. Determination of Banks Cost of Funds .. Framework for the Implementation of Risk-Based Interest Pricing Model .. 20 Opening of new Accounts .. Issuance of Nigerian Treasury Bills and Federal of NIGERIA Bonds.

4 20 Ways and Means Advances .. 21 Treasury Single Account .. The Payments System .. Publication of Financial .. 25 Implementation of IFRS 9 (Financial Instruments) in NIGERIA .. 26 Other Policy Measures .. Development Finance Policies .. Orderly Development of the Banking System Regulation and Supervision of Other .. Financial Institutions .. 42 SECTION FOUR FOREIGN TRADE & EXCHANGE POLICY MEASURES .. 53 New Policy Measures .. Foreign Exchange Market.

5 53 Policy Measures Retained .. Foreign Exchange Market .. Procedure for registration of e-Forms M for goods Not valid for Foreign Exchange 60 e-Form M Procedure for Importation of Petroleum Products .. 60 e-Form M Procedure .. Destination Inspection of Imports .. Import Duty Payment .. 61 Export and Trade Promotion .. 62 vCentral Bank of NIGERIA | January 2018 Monetary, Credit, Foreign Trade and Exchange Guidelines for Fiscal Years 2018/2019 Pre-shipment Inspection of Exports.

6 62 Invisible Trade Transactions .. Miscellaneous Policy Measures .. SECTION FIVE CONSUMER PROTECTION .. 65 Operational Structure .. Consumer Protection Regulation .. Consumer Complaints Resolution and Procedure .. Help Desks at the CBN .. General Complaints .. 67 ATM Complaints .. Foreign Exchange Authorised Customers .. 67 Monetary Policy Help Desk .. ANNEXURE I: PRUDENTIAL GUIDELINES FOR LICENSED BANKS .. 71 ANNEXURE II: NIFIs FORMAT FOR SUBMISSION OF REQUEST.

7 72 ANNEXURE III: .. 73 ANNEXURE IV: RELEASE OF THE GUIDELINES FOR THE OPERATION OF NON-INTEREST FINANCIAL INSTRUMENTS BY THE CENTRAL BANK OF NIGERIA .. 74 ANNEXURE V: PRUDENTIAL REQUIREMENTS FOR OTHER FINANCIAL INSTITUTIONS .. 82 ANNEXURE VI: CIRCULARS .. 85 ANNEXURE VII: GLOSSARY OF TERMS .. 90 PrefaceThe CENTRAL Bank of NIGERIA (CBN), is the apex financial institution in NIGERIA and is in charge of monetary policy, and regulation of the Nigerian financial system. It also plays the role of financial and economic adviser to Government; responsibilities entrusted to it by the CBN Act, 2007.

8 As part of its core functions, the Bank engages in stakeholder consultations and financial literacy to ensure an enlightened environment for implementation of its policies. The Monetary, Credit, Foreign Trade and Exchange Policy Guidelines, a periodic publication of the Bank, provides policy guidance to financial institutions for the fiscal period in the medium-term horizon. This biennial publication is designed to assuage policy ambiguity, demonstrate the direction and policy continuity of the Bank as maintained over time, and to provide prudential guidelines to financial institutions to avoid regulatory capture.

9 This document provides clarity on the Bank's policies and guides economic agents in their engagements with financial institutions in the country. We are, therefore, optimistic that this material will support financial institutions as they engage with their customers in the most transparent way. As usual, the Bank, in issuance of these guidelines, stands ready to defend it and to provide further information on its contents, where the need Kpughur TULED irector, Monetary PolicyCentral Bank of NIGERIA @ 2018 Monetary, Credit, Foreign Trade and Exchange Guidelines for Fiscal Years 2018/2019viiCentral Bank of NIGERIA | January INTRODUCTIONThe conduct of monetary policy by the CENTRAL Bank of NIGERIA (CBN) in 2018/2019 will continue to be anchored on the Medium-Term Framework.

10 The need for such framework is based on the fact that monetary policy impacts its ultimate goal with a lag. A medium term framework would thus enable the Bank anchor expections and therefore, avoid over-reaction to temporary shocks and time inconsistency problems associated with frequent changes in policies. The 2018/2019 Monetary, Credit, Foreign Trade and Exchange Policy Guidelines covers the period January 2018 to December 2019 and is designed to ensure both price stability and financial stability.


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