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UPDATE 1-Nigeria's central bank to create fund to fight coronavirus

Published 16/03/2020, 15:41
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(Adds details, quotes)
By Camillus Eboh
ABUJA, March 16 (Reuters) - Nigeria's central bank will
create a 50 billion naira ($163 million) fund to combat the
impact of the coronavirus pandemic on Africa's biggest economy
and allow banks to give their customers more time to repay
loans, its governor said on Monday.
Godwin Emefiele announced the support package at a press
conference in the capital, Abuja. Africa's top oil producer,
which has had two confirmed cases of the virus, has been hit
hard by low crude prices caused by lower demand from China and a
price war between Saudi Arabia and Russia.
He said credit support for the health sector aimed to meet
"potential increase in demand". It was intended for loans to
pharmaceutical companies planning to expand or establish drug
manufacturing plants in Nigeria and to health companies that
wanted to build hospitals and clinics.
Other measures announced include cutting interest rates on
some central bank loans to 5% per annum, down from 9%, for one
year.
"The CBN (Central Bank of Nigeria) stands ready to provide
liquidity back stops as and when required in view of its role as
banker to the federal government and lender of last resort,"
said Emefiele. The bank on Thursday reacted to speculation about
a possible devaluation of the naira by saying "market
fundamentals" did not support such a move. The finance ministry last week said Nigeria would cut the
size of its record 10.6 trillion naira ($34.6 billion) budget
for 2020 due to low oil prices. The spending plan was calculated
assuming a price of $57 per barrel, but Brent crude LCOc1 has
hovered around $33 a barrel in recent days. = 306.0000 naira)

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