The monetary policy committee of the Central Bank of Nigeria (CBN) on Tuesday voted to keep the monetary policy rate at 13.5%.
CBN governor, Godwin Emefiele who made the ddisclosure while addressing newsmen at the end of the committee’s meeting, said nine members voted to hold rates.
Emefiele explained that a hold will help the committee better understand the momentum of growth as increasing the cost of credit will further diminish investment flow and have a negative impact on output growth.
He said, “Given that there was a marginal increase in headline inflation, there is a need to restrain from loosening in order not to worsen inflationary pressures,” he stated, adding that holding will help the committee evaluate the impact of interventions to support lending to the priority sectors of the economy.
“Data on the domestic economy suggests some fragility in output growth during the second quarter of 2019 with improved output for the rest of the year.”
“Committee enjoined the federal government to build fiscal buffers through a more realistic benchmark of oil price for the federal budget
“Output growth remains well below the economy’s potential indicating the existence of spare capacity for non-inflationary growth, an opportunity which should be explored through increased credit delivery to the private sector.”
The committee also voted to retain the asymmetric corridor at +200/-500 basis points around the MPR, cash reserve ratio (CRR) at 22.5% and liquidity ratio at 30%.
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