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CBN explains reason MPC retains lending rate at 11.5 percent in economy

Mr. Godwin Emefiele, Governor of CBN

*The Central Bank of Nigeria discloses the Monetary Policy Committee (MPR) retains lending rate along with other parameters in order to allow the necessary stability for policy objectives to succeed in the West African country

Gbenga Kayode | ConsumerConnect

In a strategic move to allow the necessary stability for monetary policy objectives along with other parameters to come to fruition, the Central Bank of Nigeria (CBN) has announced the Monetary Policy Committee (MPC) retains the Monetary Policy Rate (MPR) at 11.5 percent and the asymmetric corridor of +100/-700 basis points around the MPR in the Nigerian economy.

ConsumerConnect reports Mr. Godwin Emefiele, Governor of CBN, who disclosed this development at a media briefing after the MPC’s two-day meeting Friday, September 17, 2021, in Abuja, FCT, announced that the Cash Reserve Ratio (CRR) at 27.5 percent and 30 Liquidity Ratio are also maintained.

Naira denominations

Emefiele noted the MPC retained the MPR along with other parameters in line with its decision to allow the necessary stability for policy objectives to come to fruition in the West African country.

The Governor of CBN further stated: “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 percent.

“In summary, MPC voted as follows, one, retain MPR at 11.5 percent; retain the asymmetric corridor of +100/-700 basis points around the MPR; retain the CRR at 27.5 percent; and retain the Liquidity Ratio at 30 percent.”

According to him, the MPC weighed the effect of tightening or loosening while considering the impact on output growth and employment among others.

The CBN Chief also said that members of the Committee felt that tightening would contract the current level of system liquidity, and thus reduce demand pressure on the Forex market in the economy.

Emefiele, therefore, warned the Bankers’ Bank would go after illegal operators in the Foreign Exchange (Forex) market with a view to stopping them from frustrating the Bank’s policy measures towards a stable Naira.

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