The Monetary Policy Committee (MPC) of the Central Bank of Nigeria declared that the country’s Monetary Policy Rate (MPR) will remain at 11.5 per cent for the umpteenth time.
Godwin Emefiele, the governor of Nigeria’s central bank, stated this on Monday in Abuja while presenting a statement from the CBN’s second MPC meeting for 2022, adding that the committee kept all other parameters constant.
The Asymmetric Corridor of +100 -700 basis points around the MPR was kept, as was the Cash Reserve Ratio (CRR) of 27.5 per cent and the Liquidity Ratio of 30%.
According to Emefiele, the committee’s ten members were split on policy recommendations at the meeting.
“Three members voted to raise MPR by 25 basis points, one member voted to raise MPR by 50 basis points while six members voted to hold all parameters constant, ” he said.
According to Emefiele, the MPC was of the view that increasing the rates during inflation could adversely impact the economic recovery and stifle expected investment expansion.
“Tightening would reverse the steady improvement recorded in credit expansion, and it will not necessarily tame inflation.
“On the other hand, loosening will trigger further liquidity challenge and also trigger foreign exchange demand pressure as the excess liquidity would exert demand pressure on the foreign exchange market,” he said.
In light of the current economic environment, the committee adopted a policy stance that indicates a precautionary and consistent approach.