The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has agreed to hold the prime lending rate otherwise referred to as Monetary Policy Rate (MPR) at 11.5 per cent, which has remained so for quite a while..
Rising from the committee’s 282nd meeting on Tuesday, the Apex bank Governor, Godwin Emefiele, said the MPC also unanimously agreed to hold all other monetary policy parameters constant to sustain the growth of the economy.
The Cash Reserved Ratio (CRR) is pegged at 27.5 per cent and the Liquidity Ratio at 30 per cent while Asymmetric Corridor was retained at +100 and -700 basis points around the MPR.
Emefiele said the MPC was satisfied that its policy actions in the past have started yielding the desired positive outcome with the remarkable improvement in the nation’s Gross Domestic Product, which stood at 4.03 per cent during the third quarter of 2021 as well as the consecutive moderation in inflation to 15.99 percent as at October.
“Given the level of its conviction about the efficacy of actions taken on macroeconomic variables, MPC felt that tightening could increase cost of funds and constrain growth, while loosening could compound distortion in the money market. We believes that the existing monetary policy stance has supported economic growth and recovery and should be allowed to continue for a little longer for consolidation,” he said.
According to the CBN Governor, consolidation would allow the MPC actualise its mandate of price stability which encourages economic growth.