The Monetary Policy Committee, MPC, of the Central Bank of Nigeria, CBN has made a decision to retain interest rate at 14%.
Rising from its two day meeting on Tuesday, January 24, the MPC, said it will retain the Monetary Policy Rate (MPR) at 14 per cent; retain the cash reserve ratio (CRR) at 22.5 per cent; retain the Liquidity Ratio at 30.00 per cent; and retain the Asymmetric corridor at 200 and -500 basis points around the MPR.
In a communiqué read by Mr Godwin I. Emefiele, Governor, Central Bank of Nigeria at the end of the meeting, he said the committee’s unanimous decisions were shaped by the consideration of the headwinds in the domestic economy and the uncertainties in the global environment.
To arrive at the decisions, he said the Committee re-assessed the headwinds, which confronted the economy in 2016 and the opportunities for recovery in 2017.
In particular, the MPC evaluated the implications of the rising wave of nationalistic ideologues across the West, the re-evaluation of trade agreements and the possibility of rapid monetary policy normalization in the United States, with adverse consequences for other countries, including Nigeria.
“The uncertainties underpinning the implementation of Brexit and the apparent retreat from globalisation and free trade were also important points of reflection,” he said.
“In recognition of the seemingly inevitable structural shift in the global economy, the Committee reiterated the need to be more inward looking and hasten efforts towards economic diversification to support the domestic economy and improve life for the Nigerian people. Consequently, members acknowledged the imperative of sectoral policies and greater coordination of monetary and fiscal policy. “
He said the MPC was concerned that the current situation was not amenable to simplistic analyses and quick fixes such as have found expression and increased attention at different fora and the media.
