The Central Bank of Nigeria (CBN), on Tuesday, held the Monetary Policy Rate (MPR) at 11.5 per cent and retained the Cash Reserves Ratio at 27.5 per cent as it battles to combat rising inflation and a recession.
Speaking at the apex bank’s first Monetary Policy Committee (MPC) meeting in 2021, CBN Governor, Godwin Emefiele, said all 10 members of the committee voted to stick with the current rate.
Also retained are the Liquidity Ratio which was left at 30 per cent; and the Asymmetric corridor which was left at +100 and -700 basis points around the MPR.
Emefiele also disclosed that the CBN has secured approval from President Muhammadu Buhari to restructure the Nigeria Commodity Exchange.
The CBN governor said the Bank can no longer sit back and watch unscrupulous commodity merchants hoard commodities and force the prices of commodities to be high.
The bank cut rates twice last year to try to stimulate an economy that has been hobbled by the COVID-19 pandemic and an oil price crash.
The bank is facing the challenge of stimulating growth at the same time as trying to curb double-digit inflation while also propping up the ailing naira currency, hit by lower oil receipts, Emefiele said.
Africa’s biggest economy fell into its second recession in four years in the third quarter.
Nigeria, the continent’s top oil exporter which relies on crude sales for 90% of foreign-exchange earnings, was last in recession in 2016. It emerged the following year, but growth has remained fragile since.