Monetary Policy Committee: CBN retains interest rate at 14%
The committee was hesitant to change the current economic configurations in order to allow the existing monetary and fiscal policies achieve its intended impacts on targeted economic variables.
The Monetary Policy Committee of the Central Bank of Nigeria (CBN) on Tuesday. May 23. 2017 retained all key policy rates to strengthen the current economic recovery path of the country.
Mr Godwin Emefele, the Governor of CBN said the committee was hesitant to change the current economic configurations in order to allow the existing monetary and fiscal policies achieve its intended impacts on targeted economic variables.
Mr Emefele also noted while addressing journalists on the outcome of the two-day meeting stated that the country will exit recession by the third quarter of 2017 which will be occasioned by the favourable financial and economic indicators in the country.
“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.
“In summary, we decided to, one, retain MPR at 14 per cent. Two, retain Cash Reserve Ratio (CRR) at 22.5 per cent. Three, retain liquidity ratio at 30 per cent, and four retain the asymmetric corridor at plus 200 and minus 500 basis points around the MPR,” the CBN governor noted.
The Moody’s Investors Service also reported that the current foreign currency challenges in Nigeria and other Sub-Saharan African countries will still take a longtime time to ease off.
Moody’s in one of its report titled, “Foreign Currency Shortages are Subsiding But Will Take Time To Overcome”, the rating agency noted that although the forex challenges in Nigeria are easing, it will take time for the financial sector to restore their financial health.
The agency concluded that it is expecting these challenges to ease in 2018.