MPC: Again CBN retains interest rate at 14%
The Central Bank of Nigeria (CBN) at the end of its second Monetary Policy Meeting (MPC) in 2017 voted to retain MPR at 14%.
Even the Cash Reserve Ratio was maintained at 22.5 per cent; the asymmetric corridor at +200 basis points and -500bps; and also maintain the liquidity ratio at 30 per cent.
Briefing the journalists on the outcome of meeting in Abuja, the CBN’s Governor, Mr Godwin Emefiele said, the Committee, in consideration of the headwinds in the domestic economy and the uncertainties in the global environment, decided by nine out of 10 members to retain the MPR at 14.0 per cent, alongside all other policy parameters adding that only one member voted to raise the MPR.
He said “ the MPC decided to: (i) Retain the MPR at 14 per cent; (ii) Retain the CRR at 22.5 per cent. Retain the Liquidity Ratio at 30.00 per cent; and (iv) Retain the Asymmetric corridor at +200 and -500 basis points around the MPR.”
Disclosing the Considerations of the Committee, he said, “the Committee re-evaluated the implications for Nigeria of the continuing global uncertainties as reflected in the unfolding protectionist posture of the United States and some European countries; sustenance of the OPEC-Russian agreement to cut oil production beyond July 2017; sluggish global recovery and the strengthening U.S. dollar.
“The Committee also evaluated other challenges confronting the domestic economy and the opportunities for achieving price stability, conducive to growth in 2017. In particular, the Committee noted the persisting inflationary pressures; continuing output contraction; high unemployment rate; elevated demand pressure in the foreign exchange market; low credit to the real sector and weakening financial system indicators, amongst others. Nonetheless, members welcomed the improved implementation of the foreign exchange policy that resulted in naira’s recent appreciation.