In the midst of confessed policy dilemma and other monetary considerations, the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) has retained the Monetary Policy Rate at 11.5 per cent.
Presenting the communique from the MPC meeting on Tuesday, CBN Governor, Mr Godwin Emefiele, explained that the committee also agreed to hold all other parameters constant.
The Cash Reserve Ratio (CRR) was retained at 27.5 per cent, Liquidity Ratio at 30 per cent and the Asymmetric Corridor at plus 100 and minus 700 basis points around the MPR.
The News Agency of Nigeria (NAN) reports that the MPC is retaining all the parameters unchanged for the fourth consecutive time.
Emefiele explained that the committee’s decisions were informed by the need to thread cautiously so as not to reverse recent economic gains, especially the exit from recession.
He said that three members of the committee voted to increase the MPR by 60, 75 and 50 basis points, respectively, while six members voted to hold all parameters unchanged.
“The committee decided by a vote of three members to increase MPR by 60, 75 and 50 basis points, respectively, while six members voted to hold all parameters constant.
“The dilemma that confronted the committee relates to whether to continue to focus on efforts to stimulate output growth.
“It was also to decide whether to focus on reigning in inflation, which at 17.5 per cent, is almost attaining the January 2017 inflation level of 18.72 per cent,’’ Emefiele said.
He said that given that the recent exit from economic recession is fragile, any decision to drastically reign in inflation could result to another recession.
He said that the MPC decided to focus on consolidation of the economic recovery process by taking actions that would continue to stimulate output growth and create employment.
“But at the same time, we have an eye on efforts to moderate the inflationary pressure using the current administrative measures adopted by the CBN,’’ he said.
He added that the committee also advised the Federal Government to swiftly address the level of unemployment so as to moderate restiveness amongst the populace.