The Central Bank of Nigeria (CBN), has retained the Monetary Policy Rate (MPR) at 11.5 per cent at its 277th Monetary Policy Committee MPC meeting, the first this year on Tuesday, and the decision was unanimous.
Mr Godwin Emefiele, Governor of the CBN disclosed this while reading the communiqué from the meeting. He also said the MPC agreed to retain cash reserve ratio (CRR) at 27.50 percent, liquidity ratio at 30 percent and the asymmetric window at plus 100 and and minus 700 basis points around the MPR. All prevailing rates were equally agreed on during the last MPC meeting on November 24, 2020.
The CBN governor said the committee was confronted with policy choices, either to aggressively reverse inflationary pressure in the country or support measures aimed at enhancing growth and reversing the current economic recession.
“MPC agreed to reverse the inflationary trend and pursue price stability in the growing economy. MPC agreed that an aggressive expansionary measure may worsen inflation and result to negative consequences on the exchange rates.
“On this basis, MPC agreed to hold all basic parameters constant. MPC was of the view that the CBN should pursue its strategy of systematic synchronisation of monetary and fiscal policy accommodation through its development finance initiatives aimed at mitigating the impact of the COVID-19 pandemic on Nigerians,’’ he said.
Emefiele said that the committee encouraged the Federal Government not to consider another wholesale lockdown of the economy so as not to reverse the gains of the various economic stimulus packages provided in 2020.
“It also encouraged the CBN to improve credit facilities to households, Micro, Small and Medium Enterprises (MSMEs), the health sector as well as the agriculture and manufacturing sectors,’’ he said. He explained that such a move was expected to increase manufacturing output and improve the GDP.