BY SEYIFUNMI LUMEKO
Governor of the Central Bank of Nigeria, CBN, Godwin Emefiele on Monday said that 12.5 per cent remains Nigeria’s benchmark interest rate.
Emefiele said the retention of the MPR at 12.5 per cent was the decision of the Monetary Policy Committee at their July 20, 2020 meeting.
According to him, increasing MPR at the current stage of the economy would be counter-intuitive and would result in upward pressure on market rates and cost of production.
Emefiele said: “In view of the foregoing, the committee decided by a majority vote to retain the Monetary Policy Rate at 12.5 per cent and to hold all other policy parameters constant.
“The committee decided by a vote of eight members to hold and two members voted to reduce MPR. All members voted to retain all other policy parameters.
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“In summary, the MPC voted to retain the MPR at 12.5 per cent; retain the asymmetric corridor of +200/-500 basis points around the MPR; retain the CRR (Cash Reserve Ratio) at 27.5 per cent, and retain the Liquidity Ratio at 30 per cent.”
He explained that further cut in MPR might not necessarily lead to a corresponding decrease in market interest rate, considering the current economic challenges.
He said the committee was mindful of the cut in policy rate at the last MPC meeting and the need to allow time for the transmission effect to permeate the economy.
