CBN retains interest rate, other parameters

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GODWIN EMELIFE, CBN GOV.

The Central Bank of Nigeria, CBN, on Tuesday concluded its Monetary Policy Committee, MPC, meeting, leaving the Monetary Policy Rate, MPR, which serves as the national lending rate, at 14 per cent.

 

Emefiele, who announced this to newsmen at the end of the meeting, stated that the Cash Reserve Ratio, CRR, and the Liquidity Ratio were respectively left at 22.5 per cent and 30 per cent.

 

He explained that the committee considered holding the rates because it would allow more clarity for the economy.

 

The MPC had in July 2016, voted that the rates be pegged at a 10-year high. It attributed the high food index to attacks on farmers by herdsmen and flooding in some parts of the country.

 

Emefiele also announced that the nation’s external reserves stands at $32.9 billion.

 

According to him, “The committee noted that the negative real interest rates did not support the recent flexible foreign-exchange market as foreign investors’ attitude had remained lukewarm, showing unwillingness in bringing in new capital.

 

“The MPC was further concerned that while the situation called for obvious tightening of the monetary policy stance, the technical recession confronting the economy and the prospects of negative growth to year-end needed to be factored into the policy parameters.”

 

The monetary policy committee also said investors favoured the investors’ foriegn exchange window to the parallel market.

 

It also commended the federal government for signing the executive order on ease of doing business.

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