BEVERLY HILLS, March 24, (THEWILL) – The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has voted unanimously to retain the monetary policy rate at 13.5%.
This was announced by Godwin Emefiele, CBN governor, on Tuesday after a two-day meeting of the committee.
Emefiele said the decision was reached to allow previously announced interventions “time to permeate the economy and allow pandemic to wear out itself”.
“Taking note of the recent actions of the bank in response to the Covid-19 the committee resolved to allow time for the measures to permeate the economy while allowing the pandemic to wear out its plateau before deciding on further supporting policy measures to boost and strengthen aggregate demand and supply in the recovery phase of the economy,” he said.
On the considerations of whether to tighten, hold or loosen rates, Emefiele said: “In its wisdom, the committee felt that tightening would result in reining in the rising inflationary pressure and it would support reserve accretion.
“However, it would reduce the money supply and reduce deposit money banks credit creation capacity thus resulting in increasing the cost of credit with adverse impact on output growth.”
The cash reserve ratio (CRR) was retained at 27.5%, liquidity ratio at 30% and asymmetric corridor at +200 -500 basis point.