By Gift Olivia Samuel, The Sight News
ABUJA: The Monetary Policy Committee (MPC) of the Central Bank of Nigeria(CBN), has reduced the interest rate to 13.5 per cent.
The Monetary Policy Rate (MPR) which has been maintained at 14 per cent since July 2016, was on Tuesday reduced after strong deliberations by the Committee.
The CBN Governor, Mr. Godwin Emefiele who announced this on Tuesday while briefing Journalists after the MPC meeting in Abuja, said that two members voted to hold MPR at its current level, while 10 members voted to hold other parameters constant while a member voted to reduce the cash ratio by 100 basis point from 22.5 to to 21.5.
According to him, the MPC voted to adjust the MPR by 50 basis point from 14 to 13.5 per cent, retain the Asymmetric corridor of +200/-500 basis point around the MPR, retain the CRR at 22.5 per cent and retain the liquidity ratio at 30 per cent.
Speaking on the implications of the move, he noted that, “The MPR has been on about 14 per cent since July 2016 and with the relative stability we have seen in the macroeconomic variables over the last two to two and a half years, we just think that this should be the next phase.
“Here, we should be talking about consolidating growth, how to create more jobs and reduce the level of unemployment in our country for the people, how to diversify the base of the Nigerian economy and that in doing this, we will continue to keep our eyes on the stability that we have achieved so far in the macroeconomic environment”.
He further noted that reducing the MPR will naturally mean that the MPC is softening gradually and will continue to do what they are doing and have done in the past to keep inflation moderated and exchange rate stable, adding that they are moving in the right direction.
“I mean, continue to do what we are doing that is, keeping inflation low, keeping the exchange rate stable, to ensure that reserves remain on positive trajectory at least comfortable level to sustain the level of growth in our economy but at the same time, there is a need for us to consolidate on what we have achieved so far and that means that we need to begin to look at growth again”, he remarked.
Reiterating the need to begin looking at growth again, he added that while keeping eyes on those other parameters, there is also need to signal a direction from monetary policy to the direction of supporting and accelerating growth in the economy.
Emefiele, however stated that there won’t be pressure on the Naira, “my answer is a capital no, I don’t see that. We will withstand any pressure”.