Business

CBN initiates fresh tests for banks, set to reassess financial sector

CBN raises interest rate to 14%, second time in 2022

Adebiyi was speaking during the mid-year review of the economic outlook 2022 of the Chartered Institute of Bankers of Nigeria (CIBN), in Lagos.

While shedding more light on the tests, he noted that the CBN’s main target was the risk quality of the restructured loans as the apex bank was set to provide mandatory provisioning for the banks to ensure such risks were addressed.

Adebiyi further noted that the stress test was a futuristic move aimed to cushion the effect of the resurgence of the COVID-19 pandemic, and the Russia-Ukraine crisis which have been projected to have a negative fallout on the country’s economy in the second half of the year.

Speaking further, he noted that the two developments had negatively affected global growth prospects, caused some heightened inflationary pressures in major economies, and triggered an economic imbalance in the global finance market.

The CBN stress test for banks comes amid the recent invitation of the CBN Governor by the Nigerian senate.

The senators aimed to grill the banking chief on the modalities the apex bank is taking to support critical sectors of the economy using its intervention funds.

The steady fall of the Naira was also another case as the exchange rate in the autonomous segment (BDCS) of the foreign exchange market as of Thursday, July 28, 2022 was N710 to one U.S. dollar.

This figure is projected to end at N1000 by end of the year based on the current rate of depreciation.

The CBN has, however, noted that amid the harsh economic realities, Nigeria’s external reserves have been projected to remain stable against rising crude oil prices.

On the permutation that would shower in a positive fiscal half year, the bank guru noted that revenue from non-oil sources is expected to increase in the second half of 2022.

Add Comment

Click here to post a comment

Categories

Newsletter

Loading