The Managing Director and Chief Executive Officer of Cowry Asset Management Limited, Mr. Johnson Chukwu has said that the re-injection of liquidity into the economy is an imperative if Nigeria is to have a good economic indices in the remaining half of the year 2016.
Chukwu who made this position known while interacting with our correspondent in Lagos said that this could come from the review of the modalities for running the Treasury Single Account (TSA) by the Federal Government.
According to him,” I am not saying that the federal government should pump back the money into commercial banks but we could use modern technologies to allow commercial banks to have access to that fund and then while we still make sure that the government uses the money for payment when the need arises. There is no need keeping over N3 trillion in the Central Bank.
“They should look at the cash liquidity ratio and given the current liquidity situation, it is possible to leave cash liquidity at 10% and allow liquidity to come back into the system. We need to introduce back liquidity into the system, good a thing the allocation for FX is improving, good a thing the federal government is talking to the Niger-Delta avengers, if we address those issues, we should have improved liquidity.
“What the system needs is liquidity and the workers will receive salaries for sometimes and with that their salaries, they can consume and then the consumption will lead to another circular flow of income, manufacturers will go back into base. With improved liquidity, banks will be in a better position to lend. These are the things we should be addressing if we want to have an improvement in the remaining part of the year”.
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