The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Tuesday made good financial analysts’ prediction that its Monetary Policy Rate (MPR) will be retained at 14 per cent.
Besides retaining the base interest rate at 14 per cent, the Committee also kept Cash Reserve Ratio (CRR) at 22.5 per cent and Liquidity ratio at 30 per cent while retaining the asymmetric corridor at plus 200 and minus 500 basis points around the MPR
Addressing journalists after the MPC meeting in Abuja, CBN Governor, Godwin Emiefele, who further assured that the recession corridor would end by the third quarter of 2017, said: “In consideration of the challenges weighing down the domestic economy and the uncertainty in the global environment, the Committee decided by a unanimous vote of eight members in attendance to retain the MPR at 14 per cent, alongside all other parameters”.
Emiefele said the MPC’s hesitancy to basically alter the MPR is based on current economic policy outline and the need to let existing policies fully achieve their intended goals and objectives.
Interestingly, rising from MPC meeting, the apex bank injected $186.5 million into the invisible and the whole Wholesale Secondary Market Intervention Sales (SMIS) segments of the forex market.
According to CBN Acting Director, Corporate Communications, Isaac Okorafor, the amount comprises $36.5 million in the invisibles; $50m for Small and Medium Enterprises (SMEs) segments; and $100 in the wholesale segment.
He said the CBN equally approved the sale of $100 million at the Wholesale Secondary Market Intervention Sales (SMIS) auction announced on Monday, May 23, 2017, adding that the apex bank will continue to ensure every necessary intervention in the interbank market to sustain the supply of forex to meet legitimate foreign exchange demands by customers.
Okorafor said CBN’s efforts at sustaining its intervention in the forex market have yielded some positive results with the Naira is making steady gain against major currencies, noting that the development confirms Governor Emiefele’s assurances on sustaining the FOREX intervention to ensure the convergence of the forex rates.