The Monetary Policy Committee (MPC) of the Central Bank of Nigeria has retained the Monetary Policy Rate (MPR) at 11.5 percent.
The CBN Governor, Godwin Emefiele, disclosed this after the committee’s two-day meeting in Abuja on Tuesday.
It also retained the Cash Reserve Ratio and Liquidity Ratio at 27.5 per cent and 30 per cent respectively.
Announcing the committee’s decision, Emefiele said, “The MPC made the decision to hold all parameters constant. The committee thought by unanimous vote to retain the Monetary Policy Rate at 11.5 per cent.
“In summary, MPC voted as follows, one, retain MPR at 11.5 per cent; retain the asymmetric corridor of +100/-700 basis points around the MPR; retain the CRR at 27.5 per cent; and retain the Liquidity Ratio at 30 per cent.”
He said, in the view of the MPC, although the economy has succeeded in exiting the recession, the recovery was very fragile, given that the GDP of 0.51 per cent was still far below population growth rate.
The committee, he noted, was of the strong view to consolidate on all administrative measures currently being taken to spur output growth.
Over the past year, the central bank has introduced measures such as a moratorium on loan-interest payments, reducing lending rates for critical sectors and increasing the minimum loan-to-deposit ratio for banks in an effort to stimulate the economy.
The decision to retain the 11.5 percent lending rate is expected to allow further economic growth, despite persistent inflationary pressures, after the country exited recession last year.
Nigeria’s annual inflation rate declined slightly to 18.12% in April 2021 from 18.17% in March, but remained well above the central bank’s target range of 6-9%, continuing a trend that began in 2015. Meanwhile, latest data showed Nigeria’s economy advanced by just 0.5% in the first three months of 2021, slightly faster than a 0.1% rise in the last quarter of 2020, suggesting a slow recovery.
