By Tony Obiechina, Abuja
The monetary policy committee of the Central Bank of Nigeria (CBN) on Tuesday again voted to retain the monetary policy rate (MPR), which measures interest rate, at 11.5 percent.
Addressing journalists after the committee’s first meeting for the year at the CBN headquarters in Abuja, the apex bank governor, Mr Godwin Emefiele, said the committee members unanimously retained key rates.
He said the committee voted to maintain the key lending rate at 11.5 percent, with the asymmetric corridor of +100 and -700 basis points around the MPR and liquidity ratio at 30 percent.
The CBN also held MPR constant throughout 2021, but it had reduced the rates from 12.5 per cent to 11.5 per cent in September 2020 due to the Covid-19 pandemic.
Emefiele who acknowledged the threat of rising inflation at 15.63 per cent from 15.4 per cent in November, 2021 said inflation in in the country will abate as food supplies, major component of the inflation, will improve.
He said the MPC believes the current policy on growth would be retained as any increase in the benchmark rate would threaten the economy, adding that loosening the rate will trigger foreign exchange pressure and lead to forex depreciation.
He also added that tightening will negatively affect the growth plans of the monetary policy authorities.
The governor said based on these considerations, the MPC retained the Monetary Policy Rate at 11.5 per cent; asymmetric corridor at +100/–700 basis points around the MPR; Cash Reserve Ratio at 27.5 per cent; and Liquidity Ratio at 30.0 per cent.
