The Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) on Monday retained it’s interest rate (MPR) at 11.5 per cent.
Announcing the outcome of the MPC meeting, the Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, said all parameters were also retained.
He added that the Assymetric Corridor of +100 -700 basis points around the MPR was retained, Cash Reserve Ratio (CRR) retained at 27.5 per cent; and the Liquidity Ratio retained at 30 per cent.
While the ten members of the committee at the meeting were divided on policy decisions.
“Three members voted to raise MPR by 25 basis points, one member voted to raise MPR by 50 basis points while six members voted to hold all parameters constant,” he said.
He noted that the the MPC was of the view that increasing the rates during inflation could adversely impact on economic recovery and stifle expected investment expansion.
“Tightening would reverse the steady improvement recorded in credit expansion, and it will not necessarily tame inflation.
“On the other hand, loosening will trigger further liquidity challenge and also trigger foreign exchange demand pressure as the excess liquidity would exert demand pressure on the foreign exchange market.”
The committee also adopted a policy stance that indicates a precautionary and consistent policy stance with the prevailing economic conditions.
