The Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) during its 276th meeting held on Tuesday, unanimously voted to retain the Monetary Policy Rate (MPR) at 11.5 percent.
The MPC had on 22 September 2020 voted to reduce the Monetary Policy Rate (MPR) to 11.5% from 12.5%.
In its last MPC meeting for the year 2020, the committee voted as follows:
- To retain MPR at 11.5 percent.
- To retain CRR at 27.50 percent.
- To retain liquidity ratio at 30 percent.
- To maintain an Asymmetric Window of +100 and -700 basis points around the MPR.
The Central Bank Governor, Godwin Emefiele, disclosed this during a press briefing after the meeting on Tuesday.
According to Emefiele, he is optimistic that Nigeria will exit recession in Q1 of 2021 based on the effort made by CBN and the fiscal authorities to create jobs and stimulate growth.
Nigeria is currently in a recession, as the nation’s Gross Domestic Product (GDP) contracted by -3.62% (year-on-year) in real terms for the third quarter (July to September 2020).
While talking about the falling value of the naira, Emifiele said that, “the foreign exchange rate in Nigeria is determined by the forces of supply and demand in the Nigeria Autonomous Foreign Exchange Market (NAFEX) window,” and that the parallel market should not be used as the true measure for the value of the naira.
The apex bank Governor said that the CBN will attack inflation from the supply side through low-interest rates. In October 2020, the inflation rate in Nigeria rose to its highest since March 2018.
Emefiele reiterated the need to diversify Nigeria’s economy to grow its foreign revenue base, which has been under immense pressure following the fall in oil prices.
By: Ifunanya Ikueze