The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has retained Monetary Policy Rate (MPR) at 12.5 percent and held all other policy parameters constant.
The CBN Governor, Mr. Godwin Emefiele made the pronouncement while reading the communique after the MPC meeting in Abuja yesterday. Emefiele also said that the committee retained the asymmetric corridor of +200/-500 basis points around the MPR.
He disclosed that eight of the 10 committee members voted to retain the rate and two voted for a rate cut. In May the bank unexpectedly cut the rate by 100 basis points to 12.5 percent, the largest rate cut since 2015.
Emefiele said the committee was mindful of the cut in policy rate at the last MPC meeting and the need to allow time for its effect to permeate the economy. The governor said the rate cut was having a “positive impact” as credit growth had increased significantly in the economy. He said the MPC also retained the Cash Reserves Ratio (CRR) at 27.5 percent as well as Liquidity Ratio at 30 percent.
“As a result, the committee noted that the earlier downward adjustment of the MPR by 100 basis points to 12.5 percent to signal the loosening monetary policy stance is yielding positive impact as credit growth increased significantly in the economy. The committee also noted the positive impact of the various fiscal and monetary interventions on households, SMEs, and manufacturing sectors.