By Gift Samuel, The Sight News
Abuja-Following the need to achieve more clarity in the evolution of key macroeconomic indicators, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Tuesday, retained the Monetary Policy Rate (MPR) at 14 per cent alongside all other policy parameters.
Disclosing this to newsmen on Tuesday, the Governor, Central Bank of Nigeria (CBN) Mr. Godwin Emefiele said that the MPC in arriving at the hold decision commits to employing maximum flexibility to guide the economy on the path to optimal growth.
Emefiele who cited the exit of the economy from the fifteen-month recession as the manifestation of the effects of fiscal actions towards stimulating the economy, noted that the Committee by a vote of 6 to 1 decided to retain the MPR at 14.0 per cent, CRR at 22.5 per cent, Liquidity ratio at 30.0 per cent and the Asymmetric Corridor +200 and -500 basis points around the MPR.
According to him; ” Although the economy is still fragile, the fragility of the growth makes it imperative to allow more time to make appropriate complementary policy decisions to strengthen the recovery.
“The most compelling argument for a hold was to achieve more clarity in the evolution of key macroeconomic indicators including budget implementation, economic recovery, exchange rate, inflation and employment generation” he said.
Meanwhile, the Apex Bank Governor also cleared the air on the CBN over funding the Federal government beyond its threshold, saying that it is only playing its role as the bankers’ bank, and adviser to the federal government.
Emefiele who noted that the money in question belongs to the government, stated that the government on its own decided its funds in banks be moved into the Treasury Single Account (TSA) in the CBN.
He said, “There is no truth about over-funding the government,what is over-drawn is much less than what the government has in its TSA account. This issue of over-funding the government sprang from what an online medium culled from what a member of the MPC said. It was a personal statement and this goes to show that members of the MPC are independent-minded people”.
He further explained that Nigeria’s Central Bank remains one of the most transparent in the world as a look at other nation’s MPC, shows that their decisions are not as detailed as Nigeria’s, adding that, “they are not so transparent”.
“The size of our balance sheet relative to GDP is 23 per cent. China is 49 per cent. Euro is 27, Swiss is 95. Taiwan is 98. In the US, it is 28 per cent. Ours is low and calls for no concern or worry. We need to get that clear” he said.
He restated the MPC’s commitment to maintaining stability in prices without which meaningful recovery cannot be achieved.