…Calls for speedy implementation of ERGP
For the fifth time in 9 months, the Central Bank of Nigeria has maintained official interbank interest rate at 14 per cent, citing recent economic indicators as supporting variables behind the decision.
Rising from its two-day meeting yesterday, the Monetary Policy Committee of the apex bank also retained the CRR at 22.5 per cent and Liquidity Ratio at 30.00 per cent.
The committee also retained the asymmetric corridor at +200 and -500 basis points around the MPR.
The CBN governor, Mr. Godwin Emefiele, disclosed this yesterday while addressing reporters at the end of the meeting in Abuja, adding that one member voted to reduce the MPR.
The MPC increased the MRR by 200 basis – points from 12 to 14 in July last year, and has refused to reduce it since then.
Giving reasons for the retention, the MPC pointed to the fact that headline inflation (year-on-year), declined for the first time in 15 months, dropping by 0.94 percentage point to 17.78 per cent in February, from the 18.72 per cent recorded in January and 18.55 per cent in December, 2016, seemingly reversing the monthly upward momentum recorded since January, 2016, within the same period the bank retained the MPR at 14 per cent.
He said the moderation in headline inflation in February reflected base effect as well as decline in the core component, which fell by 1.90 percentage points from 17.90 per cent in January to 16.0 per cent in February.
Calling for speedy implementation of the Federal Government’s economic recovery and growth plan, Emefiele said the MPC was of the conviction that fiscal policy remained the most potent panacea to most of the key negative undercurrents, that is, stunted economic activity, heightened unemployment and high inflation bedeviling the economy.
The CBN governor was vehement that available data and forecasts of key economic variables as well as the newly released Federal Government’s Economic Recovery and Growth Plan combined to indicate prospects of output recovery in 2017.
In the communiqué that was issued at the end of the meeting, the MPC expressed optimism that the adopted policy stance and other ancillary measures directed at improving the agricultural and other relevant sectors of the economy would combine to restart growth and drive down prices in the short to medium-term.
Meanwhile, commenting on the MPC decision yesterday, analysts said if the decline in inflation rate continues and the economy improves in coming months, the monetary policy will have to adopt an accommodative policy.
