The Central Bank of Nigeria, CBN, has again retained the country’s Monetary Policy Rate, MPR, commonly referred to as interest rate, at 14 per cent.
CBN Governor, Godwin Emefiele, said this on Tuesday during a press conference after a meeting of the Monetary Policy Committee.
“In consideration of the challenges weighing down the domestic economy,and the uncertainties in the global environment, the committee decided by a unanimous vote of 8 members in attendance, to retain the MPR at 14%percent alongside all other policy parameters,” Emefiele said.
He said the committee also decided to retain Cash Reserve Ratio, CRR, and liquidity ratio at 22.5 percent and 30 percent respectively.
Explaining the decision of the committee, the CBN governor said it was one of the apex Bank’s strategies to lower the inflation rate, adding that it has started yielding results.
“The MPC was of the view that whereas the downward trend in inflation is a welcome development, the rate was still significantly above the policy reference band,” Emefiele said.
“Committee is particularly happy with the gradual retreat in inflation,the relative stability in the naira exchange rate across all segments of the market and the improved prospect of foreign inflows.
“The committee was also concerned that loosening (interest rate) will exacerbate inflationary pressure and worsen the gains so far achieved in exchange rate of the naira.”
The CBN governor reiterated that the bank will increase its foreign exchange interventions by making sure that there is no shortage of forex for business transactions in the country.
He also expressed optimism that the Nigerian economy will be out of recession latest by the third or fourth quarter of 2017.