CBN retains again retains monetary policy rate at 11.5 percent

26 May CBN retains again retains monetary policy rate at 11.5 percent

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) said it again voted to retain the monetary policy rate at 11.5 percent.

Central Bank of Nigeria Governor Godwin Emefiele announced the retention during a press briefing at the CBN headquarters on Tuesday.

Emefiele said the committee voted to leave at MPR at 11.5 per cent, Cash Reserve Ratio at 27.5 percent, and Liquidity Ratio at 30 percent to allow further economic growth, after the country exited recession in the fourth quarter of 2020, amid rising inflation.

He explained that although the economy had successfully exited recession, the recovery was fragile given that the GDP of 0.51 per cent was still far below population growth rate.

So the committee was of the view that, there was a need for monetary authorities to consolidate on all administrative measures taken not only to rein in inflation, but also on the actions so far taken to grow output.

He said in the committee’s view, such measures should include boosting consumption and investments, as well as diversifying the base of the economy through FX restrictions for the importation of goods and food products that can be produced in Nigeria.

The MPC also lamented the effect of insecurity on the nation’s economy and called on the Federal Government to handle it immediately to successfully tackle inflation.

On the effect of the Coronavirus pandemic, the MPC advised against another total lockdown stating that this will reverse most of the economic gains made in the country since the gradual reopening of the economy.

The MPC also noted that at least 70% of Nigeria’s population must be vaccinated if the country means to achieve economic recovery.

Responding to questions on the CBN ban on cryptocurrency transactions in Nigerian banks, the CBN governor insisted that the encrypted nature of cryptocurrency transactions makes it hard for fraud to be investigated and criminals apprehended.

According to Emefiele, no responsible Central Bank will support such transactions.