…Leaves Other Rates Unchanged
The Central Bank of Nigeria’s (CBN’s) Monetary Policy Committee (MPC) concluded its meeting on Tuesday with the retention of the Monetary Policy Rate (MPR) at 26.50%, indicating the apex bank’s sustained efforts to moderate liquidity in the economy.
Similarly, the committee retained Standing Facilities Corridor around the MPR at +50/-450 basis points; the Cash Reserve Requirement for Deposit Money Banks at 45.00%; Cash Reserve Requirement for Merchant Banks at 16.00%; and the Cash Reserve Requirement on non-TSA public-sector deposits at 75.00%.
Speaking on the decisions taken at the two-day Monetary Policy Committee (MPC) meeting, the CBN Governor, Olayemi Cardoso, said members unanimously agreed to leave the policy rates unchanged in view of the risks in the global economic landscape particularly uncertainties surrounding the United States’ economy and the ongoing conflict in the Middle East.
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As it were, the committee’s decision underscored the monetary authorities’ careful approach to balancing the fight against inflation with the need to sustain economic recovery while anchoring market expectations.
Prior to the MPC’s meeting, many investment and economic development analysts had projected that the committee would most likely retain the rates, particularly the benchmark lending rate (MPR) in view of the current micro and macroeconomic indices in the domestic economy.
In their pre-MPC meeting’s appraisal of the current macroeconomic factors of the economy, many analysts maintained that despite some slight moderation in the nation’s headline inflation to 15.91 percent in June after monthly increases in the rate in March, April and May this year, the moderation was not strong enough to warrant a rate cut by the MPC.
They hinged their stance on the not-too-stable exchange rate of the local currency in the FX markets, surging food and energy prices, and geopolitical tensions in the country.
