True to prediction, CBN retains double digit interest rate

The Central Bank of Nigeria (CBN), led by Godwin Emefiele, stood its ground Tuesday at the meeting of the Monetary Policy Committee(MPC), refusing to reduce Nigeria’s interest rate from its double digit of 14 pet cent.

This was not totally unexpected. On Monday, the CBN governor had argued, while delivering a paper at the the Second Homecoming series of the Economics Department of the University of Nigeria, Nsukka (UNN), ahead of the MPC two-day meeting, that the apex bank’s committee would not reverse itself on retaining both the interest and inflation rates at double digits because of the realities in the banking sector and the economy in general.

Predictably, the committee rose from its two-day meeting on Tuesday, with the Central Bank of Nigeria (CBN) governor, Godwin Emefiele, telling news hounds that the interest rate will remain unchanged at 14 per cent.

Emefiele said the decision of the committee at the end of meeting held at the apex bank’s headquarters in Abuja showed that the same circumstance that had made it impossible to effect a change by fiat still persists, though with some improvements.

He said six members of the 11 -man committee agreed to maintain the current monetary policy with only two members voting to ease it.

He said that apart from the MPR which was retained at 14 per cent, the committee also retained the Cash Reserves Ratio at 22.5 per cent.

Also retained are the Liquidity Ratio which was left at 30 per cent; and the Asymmetric Window which was left at +200 and -500 basis points around the MPR.

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