The Monetary Policy Committee (MPC) Tuesday rose from it’s first meeting of the year to retain the Monetary Policy Rate it lends to commercial banks at 14 per cent, the rate which the Apex bank has retained since 2016.
The Central Bank of Nigeria (CBN) governor, Godwin Emefiele said the MPC resolved to retain the Cash Reserve Ratio (CRR) at 22.5 per cent and liquidity ratio at 30 per cent.
He said Nigeria’s foreign reserve has grown from $42.54 billion as at December 2018 to $43.28 billion as at January 21.
CBN has left its lending rate for banks the same in what seems to be an effort to stabilise the financial system and stop growing inflation.
According to the CBN boss, the MPC had a meeting in Abuja where it was resolved that Monetary Policy Rate (MPR) will be retained at 14 per cent.Since June 2016 when it was at 12 per cent, the CBN has retained the rate it lends to commercial banks at 14 per cent.
This rate has been maintained for 30 consecutive months or 15 meetings of the MPC.
Emefiele also said the committee resolved to “retain the CRR at 22.5 per cent and liquidity ratio at 30 per cent, with an asymmetric corridor of +200/-500 basis points around the MPR.
The CRR is the funds kept with the CBN as a minimum deposit a commercial bank must hold as reserves which is a monetary policy tool used to influence borrowing and interest rates by changing the amount of money at the banks’ disposal for loans purposes.
The CBN governor noted that the country’s debt was approaching the pre-2015 levels and warned government against the risk of rising debt level.