Mr. Godwin Emefiele, Governor of CBN

CBN outlines measures to avoid a recession, cuts MPR to 12.5 percent

* Disburses N93.2bn to Nigerian manufacturers

* MPC calls on banks to help facilitate disbursement of loans to priority sectors

* Urges aggressive, strategic approach to gradual reopening of economy

Isola Moses | ConsumerConnect

The Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) has decided to cut the Monetary Policy Rate (MPR) by 100 basis points from existing 13.5 percent to 12.5 percent, while retaining all other policy parameters in the nation’s economy.

ConsumerConnect reports that the committee, with 10 members in attendance rising from its 273rd meeting Thursday, May 28 voted to hold the liquidity ratio at 30 percent. Cash Reserve Ratio (CRR) is also pegged at 27.5 percent and the asymmetric corridor at +200 and -500 basis point around the MPR.

Mr. Godwin Emefiele, Governor of CBN and Chairman of MPC, in a communiqué after the meeting, called for an aggressive and strategic approach to the gradual reopening of the economy.

He stated that both lives and livelihoods should be saved from the devastating effects of the COVID-19 pandemic.

Nonetheless, Emefiele stressed that reopening of the nation’s economy must align with the safety protocols reeled off by designated health authorities.

Emefiele noted that Nigeria may escape another recession if concerted efforts are made to boost domestic production and export.

According to the CBN Governor, under the N100 billion healthcare intervention fund, the Bankers’ Bank has approved and disbursed N10.15 billion for some projects for the establishment of advanced health centres, and expansion of some pharmaceutical plants to make essential drugs and intravenous fluids.

“From the N1 trillion intervention targeted at the agriculture and manufacturing firms, the CBN has disbursed N93.2 billion under the real sector support fund to boost local manufacturing and production across critical sectors.

“It consists of over 44 greenfields and brownfield projects. The bank has also approved N10.9 billion to 14,331 beneficiaries,” he disclosed.

It was further learnt that under the N50 billion Targeted Credit Facility (TCF), for households and SMEs N4.1 billion has been disbursed to 5,868 successful applicants.

The committee reached out to banks to help facilitate the disbursement of those loans to priority sectors of the economy so as to stimulate aggregate demands and create more jobs.

Emefiele said: “This is the most potent time to diversify our economy. We must follow through our policies on diversification and there’s no other better time than now.

“Over 40 countries have banned export of goods from their countries. Thank God, President Buhari asked us to produce rice. We’re almost self-sufficient in rice.

“Now rice exporting nations have halted export as local demand has risen by about 70per cent because they’re running out of stock.

“They didn’t farm due to COVID-19, same thing with those exporting drugs.”

On resumption of Forex sales to Bureau De Change (BDCs), Emefiele said CBN would in no distant time curb the nefarious activities of some speculators.

“If people say they want Forex to travel and there is a travel ban, it means some people got naira somewhere and want to buy dollars and keep for themselves,” he added.

The CBN Chief said there was an urgent need for better tax collection to help diversifying the country’s economic base.

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