MPC holds lending rate at 14% for the umpteenth time

African Finance ministers, Central Bank governors meet in Abuja on Monday

The Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) on Thursday, retained the Monetary Policy Rate (MPR) at 14 per cent for the 14th consecutive time,

CBN Governor, Mr Godwin Emefiele made this known during a media briefing on the outcome of the 264th MPC meeting where he said the decision was for the best interest of the country’s economy..

Emefiele disclosed that all 11 members of the committee were present at the meeting and voted to retain the MPR, which was last changed in July 2016.

He also disclosed that the committee also retained the Cash Reserves Ratio ( CRR) at  22.5 per cent, liquidity at 30 per cent and Asymmetric corridor at +200 and -500 basis points around the MPR.

“The committee underscores that by holding its policy position constant, it has confidence in the various policies and administrative measures deployed by the Bank which have resulted in the moderation in domestic price levels and stability in the foreign exchange rate.

“Thus, a hold position is an expression of confidence in the policy regime, given the gradual improvements in both output growth and price stability.

“On this premise, the downside risks to growth and upside risks to inflation appears contained.”

According to Emefiele, the committee noted that the economy was on the right path but some key sectors continued to experience significant challenges.

“The MPC, however, expressed concern about the tepid growth expectations and growing uncertainty in the global financial markets.

“These uncertainties are arising from the poor reception of the Brexit deal by British politicians, continuing trade war between the U.S. and her major trading partners, as well as the commencement of U.S. sanctions on Iran,” he said.

The apex bank chief said that the committee believed that although the domestic economy was recovering modestly from recession, the recovery was, however, tepid and efforts should be stepped up to strengthen aggregate output and demand.

His words, “In this regard, the committee urged the CBN to deepen and broaden access to finance to high employment elastic sectors with particular emphasis on small and medium scale enterprises.

“The committee called on the CBN to extend the success recorded under the Anchor Borrowers Programme to other items, including fish and palm oil, by introducing more stringent measures to curb access to foreign exchange for products that can be produced within Nigeria.”

Emefiele said that the committee welcomed the moderation in inflation in October, reflecting declining food prices.

He said that the committee believes that given the negative output gap, the proposed increase in the national minimum wage would trigger output growth due to prolonged weak aggregate demand arising from salary arrears and contractor debt.

According to him, consequently, its impact on the aggregate price level will be largely muted, given that the monetary aggregates have largely underperformed in fiscal 2018.

He opined that the prevailing stability in the foreign exchange market would continue to moderate pressures on the domestic price level.

The CBN governor affirmed that the overall outlook and risks, forecasts of key macroeconomic variables indicate a positive outlook for the economy in the fourth quarter of 2018.

He said that the committee expects that the effective implementation of the Economic Recovery and Growth Plan (ERGP) and the 2018 budget, improvements in the security challenges, enhanced flow of credit to the real sector and stability in the foreign exchange market would redirect the economy on a path of inclusive and sustainable growth.

He also said that increased production in the oil and the non-oil sectors were expected to drive output growth in the medium term.

“The inflation outlook suggests continued but moderate inflationary pressure to the end of 2018, based largely on increased consumer spending for the Christmas festivities, election-related expenditure and increased pace of implementation of the 2018 Federal government budget.

“Improvements in the security, increased harvests as well as a stable exchange rate are expected to moderate the rise in inflation.

“Overall, the outlook for the economy remains positive with a growth  projection of 1.75 per cent in 2018”, he said.

Emefiele, while fielding questions from journalists, however, warned Deposit Money Banks (DMBs), to be extremely careful in the electioneering period to not violate the money laundering Act or risk penalty.

He said that the bank’s stance on the 2019 election was very explicit on the issue of money laundering.

“Money laundering issues may arise, and haven advised them to be very careful, I believe they will be careful themselves because they have been told that if they are caught on issues like this, they will be heavily penalised.

“On lending, of course when you say bank lending to politicians, banks have their risk acceptance criteria and I do not think the banks will do that at this time, everybody must have learnt their lessons.

“We at the CBN are watching and if things go wrong or are about to go wrong we will deal with it as appropriately as possible.”

On the issue of MTN’s repatriations from Nigeria, Emefiele said it was being resolved as the apex bank and the organisation was at the verge of reaching agreements.

“There is rationale for the decision we took because we expected certain documents to be submitted.

“Those documents have now been submitted and these matters will be resolved. We have held meetings with the MTN group and we are at the verge of reaching agreements and at the appropriate time the agreement reached will be announced.

“The sanctity of the Certificate of Capital Importations (CCIs) that are being issued by our banks to our foreign investors remain sacrosanct and no other company or person is being investigated on the issue of CCI, this is an isolated matter.”

Comment With Facebook

Comments (216)

  1. I will immediately take hold of your rss as I can’t find your e-mail subscription link or e-newsletter service. Do you have any? Please permit me recognize in order that I may just subscribe. Thanks.|

  2. Quality articles is the crucial to be a focus for the users to visit the website, that’s what this site is providing.|

  3. hi!,I really like your writing so a lot! proportion we keep in touch extra approximately your post on AOL? I need an expert on this space to unravel my problem. May be that is you! Looking forward to look you. |

  4. An impressive share, I just given this onto a colleague who was doing a little analysis on this. And he in fact bought me breakfast because I found it for him.. smile. So let me reword that: Thnx for the treat! But yeah Thnkx for spending the time to discuss this, I feel strongly about it and love reading more on this topic. If possible, as you become expertise, would you mind updating your blog with more details? It is highly helpful for me. Big thumb up for this blog post!

  5. An impressive share, I just given this onto a colleague who was doing a little analysis on this. And he in fact bought me breakfast because I found it for him.. smile. So let me reword that: Thnx for the treat! But yeah Thnkx for spending the time to discuss this, I feel strongly about it and love reading more on this topic. If possible, as you become expertise, would you mind updating your blog with more details? It is highly helpful for me. Big thumb up for this blog post!

  6. Hey would you mind letting me know which web host you’re using? I’ve loaded your blog in 3 completely different web browsers and I must say this blog loads a lot quicker then most. Can you suggest a good web hosting provider at a fair price? Kudos, I appreciate it!|

  7. Whoa! This blog looks just like my old one! It’s on a totally different subject but it has pretty much the same layout and design. Outstanding choice of colors!|

  8. Hey I am so thrilled I found your blog page, I really found you by mistake, while I was looking on Askjeeve for something else, Anyhow I am here now and would just like to say thank you for a marvelous post and a all round entertaining blog (I also love the theme/design), I don’t have time to read it all at the minute but I have saved it and also added your RSS feeds, so when I have time I will be back to read a lot more, Please do keep up the awesome b.|

  9. This is the right blog for anyone who wants to find out about this topic. You realize so much its almost hard to argue with you (not that I actually would want?HaHa). You definitely put a new spin on a topic thats been written about for years. Great stuff, just great!

  10. Howdy! Quick question that’s entirely off topic. Do you know how to make your site mobile friendly? My site looks weird when viewing from my iphone 4. I’m trying to find a theme or plugin that might be able to fix this issue. If you have any suggestions, please share. Many thanks!|

  11. Remarkable! Its actually remarkable paragraph, I have got much clear idea regarding from this post.|

  12. Great blog here! Additionally your website rather a lot up very fast! What web host are you using? Can I am getting your associate hyperlink on your host? I desire my web site loaded up as quickly as yours lol|

  13. I have read so many posts on the topic of the blogger lovers except this article is in fact a fastidious piece of writing, keep it up.|

Comment here

This site uses Akismet to reduce spam. Learn how your comment data is processed.