The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR) at 11.5% and kept all the other parameters unchanged.
The Governor of the CBN, Mr. Godwin Emefiele, told journalists on Tuesday in Abuja that lowering the rate could have stimulated more borrowing, while raising the rate could have signaled the CBN’s intention to reduce the money supply in the economy.
Mr. Emefiele told journalists on Tuesday in Abuja that the committee unanimously retained key rates with the asymmetric corridor of +100/-700 basis points around the MPR.
He also said that the committee voted to retain the Cash Reserve Ratio (CRR) at 27.5 per cent as well as the liquidity ratio at 30 per cent.
According to him, the other parameters were left unchanged in the hope that they will support growth and boost production, which would ultimately rein in inflation in the short to medium term.
He explained that while the US and some advanced economies have signaled their intention to commence policy normalization, which may result in capital flow reversal and reining in the high level of inflation which had been unprecedent in the last four decades in those climes and that “for Nigeria, members were of the view that Nigeria is confronted with, not only inflation but also fragile output growth”.
“As a result, MPC believes that its current stance of price and monetary stability conducive for growth remain desirable.
“The MPC is convinced that various measures being implemented were helping, not only in boosting output growth, but also in moderating inflation,” local media reports on Wednesday quoted Emefiele as saying.
GIK/APA