CBN Keeps MPR At 14%, Eyes FX Stability
BY EDMOND ODOK, ABUJA – The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) is keeping faith with market expectations as it left the Monetary Policy Rate (MPR) untouched at 14 per cent.
Though robust discussions around existing monetary policy measures and their impact on the economy held sway on Wednesday, the MPC said its decision was in line with current market realities and consensus
Rising from its first MPC meeting of the year in Abuja, CBN Governor, Mr Godwin Emefiele said nine members of the committee unanimously agreed to maintain the current monetary policy stance.
According to him, besides the MPR, retained at 14 per cent, the MPC also kept the Cash Reserves Ratio (CRR) at 22.5 per cent.
Similarly, Emefiele said the Liquidity Ratio was retained at 30 per cent; with the Asymmetric Window retained at +200 and -500 basis points around the MPR.
He explained that the Committee is worried about the relative stickiness of food price inflation in Nigeria, despite weak demand; weak economic performance; and weak credit growth in the system.
Notwithstanding arguments that maintaining FX stability is paramount and the apex bank will avoid anything that could endanger this position, financial experts are anticipating that the MPR would ease further as the year drags on.
