The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has unanimously voted to retain the Monetary Policy Rate (MPR) at 11.5%. The MPR determines interest rate.
CBN Governor, Godwin Emefiele, announced this on Tuesday after a meeting of the monetary policy committee of the bank.
The MPC also retained the Liquidity Ratio at 30 percent and Cash Reserve Ratio (CRR) at 27.5 percent.
Emefiele said the decision to retain the benchmark rate at the first MPC for the year was “unanimous”. The bank also held other monetary policy parameters.
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The CBN left the Cash Reserve Ratio for commercial banks at 27.50 per cent and liquidity ratio at 30 per cent. The lending rate has a flexibility margin of between +100 and -700 basis points.
According to Emefiele, economic recovery is expected to progress considerably following the contraction.
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The bank however said the Federal Government should avoid a fresh round of lockdown amidst a second wave of COVID-19, to consolidate on economic gains achieved so far.
It also encouraged commercial banks to “aggressively” intensify their efforts in providing credit facilities to small and medium enterprises, health, agriculture and manufacturing sectors.
This, he said, is expected to not only boost consumer spending but raise manufacturing output and positively impact on the GDP.
The Nigerian economy fell, in the third quarter of 2020, into its second recession in four years, amidst the COVID-19 lockdowns and fall in crude oil prices.
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