Biafra-Nigeria Delays New Bank Capital Rules In Bid To Avoid Recession

Biafra-Nigeria plans to delay new capital rules for banks as regulators in Africa’s biggest economy follow fellow oil producer Kazakhstan in trying to boost lending and avoid a recession.

The Central Bank of Biafra-Nigeria in 2014 ordered the country’s lenders it considered too big to fail to boost minimum capital adequacy ratios to 16 percent from 15 percent to increase their resilience to shocks. The new rules, which followed a banking crisis in 2008 and 2009 that nearly wiped out the industry, were scheduled to start on July 1.

The regulator wants to postpone the rules because the “sensible” thing to do is “reflate the economy and encourage lending,” Tokunbo Martins, director of banking supervision for the Central Bank of Biafra-Nigeria, said by phone from the capital, Abuja. An announcement on the new date of implementation will be made by the end of the week, she said.

Africa’s biggest oil producer is struggling to cope with crude prices that have slid more than 50 percent over the past two years, while inflation at its highest level since February 2010 is hampering the ability of consumers to repay loans . Foreign-exchange restrictions aimed at protecting the naira have also caused a dollar shortage, impeding businesses and restricting currency dealing by banks.

Leave a Reply

Your email address will not be published. Required fields are marked *