TheCable

Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), has assured commercial banks that the Treasury Single Account (TSA) is no reason to panic.

While ruling out a devaluation of the naira, he attested to the fact that the movement of government accounts to the CBN drains billions of dollars from the financial system.

Emefiele expressed willingness of the CBN, under his leadership, to inject liquidity, if needed, into the interbank market, which dried up this week following movement of government departments’ accounts.

“There is no shortage of liquidity,” Emefiele told Reuters, pointing to an oversubscribed sale of treasury bills on Wednesday.

He regarded a spike in a momentary action as mere sentiment, despite the forecast of analysts that the TSA could suck up as much as 10 percent of banking sector deposits in Africa’s biggest economy.

Emefiele also added that less than N1.2 trillion ($6 billion) would be moved into the single account, but he did not specifics.

In line with President Muhammadu Buhari’s statement on Wednesday, Emefiele was emphatic about maintaining the naira currency.

“There will not be a devaluation because right now the currency is appropriately priced,” he said.

In a bid to defend the naira, the CBN bank blocked access to foreign currency to import items referred to as non-essential.

“We don’t need to give our hard currency on that but those who insist on having tooth pick from Europe or from China, instead of using Nigerian toothpick, they can go and source their foreign exchange,” Buhari had said on Friday while defending the bank’s stance.