The Central Bank of Nigeria Governor, Mr Godwin Emefiele has said that the outbreak of the coronavirus disease would lead to massive economic crisis capable of throwing many countries into recession.
Speaking on behalf of the Monetary Policy Committee of the Central Bank of Nigeria on Tuesday, Emefiele said COVID-19 undermines any monetary or fiscal stimulus unless appropriate measures were taken to trace, test, isolate and treat infected persons in order to curtail the spread.
This was the position of the committee after its two days meeting which held at the apex bank’s headquarters in Abuja.
Emefiele said “The committee reviewed the prevailing adverse conditions in the global economy such as the COVID-19 pandemic and the oil price shock as well as the likelihood of continued oil supply glut into the near future, focusing on the impact of these headwinds on the Nigerian economy.
“The committee observed that not only will the COVID-19 pandemic result in health crises, it will also result in massive economic crises that will force many countries into recession, including the leading industrialised countries.
“A review of the policy options indicates relative tightness of the current monetary policy stance.
“The CRR was increased at the last MPC meeting. Time is required for its full effects to manifest. Increasing the MPR will be contradictory to the recent reduction of interest rate in the CBN intervention windows from nine per cent to five per cent.
“Besides, an increase in MPR will be taken by the Deposit Money Banks as an invitation to increase lending rates and this will be most undesirable at this point in time when efforts are being made to avert a recession.”
He called for significant reduction in migration across the country and urged the Federal Government to take the necessary steps to safeguard the population.