By Aduragbemi Omiyale
The Central Bank of Nigeria (CBN) on Tuesday announced that members of its Monetary Policy Committee (MPC) unanimously voted to retain the key policy rates.
Governor of the CBN, Mr Godwin Emefiele, while addressing financial reporters this afternoon in Abuja after the two-day meeting, said the committee decided to hold the rates to allow more time for the implementation of the various interventions of the bank.
According to him, the MPC submitted that loosening the Monetary Policy Rate (MPR) currently at 11.5 per cent could cause the financial system to be flooded with excess liquidity as the cost of borrowing would become cheaper.
He further said any attempt to tighten the rate could be counterproductive as it would make it difficult for consumers to have access to more funds, which is supposed to stimulate the economy, especially at a time the country was making efforts to recover from the effect of last year’s global crisis.
The apex bank chief said the committee decided that keeping the rates at their present levels was the best decision to take at the moment.
He said in view of this, the MPR was left at 11.5 per cent, the Asymmetric Window left at +100 and -700 basis points around the MPR, the Cash Reserve Ratio (CRR) was left at 27.5 per cent, while the Liquidity Ratio (LR) was kept at 30 per cent.
However, Mr Emefiele noted that the committee will continue to monitor the effect of the inventions on the economy and take the appropriate action when needed.