Th Central Bank of Nigeria on Tuesday voted to maintain the Monetary Policy Committee Rate (MPR) at 11.5 per cent, alongside other key parameters.
Godwin Emefiele, the CBN Governor, disclosed in Abuja on Tuesday, at the end of a two-day meeting at the CBN headquarters, Abuja, that the committee members at its last meeting voted to retain MPR at 11.5 per cent, the rate it had been since September 2020.
Analysts at Cordros research said, the the decision is in consistent with market expectation, given that the Committee has guided that its short-term objective is to drive a rebound in economic activities despite the stubbornly high inflation and pressures on the local currency
“Like the May meeting, where there was uniformity in the voting pattern, a unanimous decision was reached among the Committee members today” they said.
Consequently, the Committee also voted to retain the Cash Reserve Requirement (CRR) at 27.5 per cent, liquidity ratio at 30.0 per cent and asymmetric corridor around the MPR at +100bps/-700bps.
On domestic growth: “Just as we envisaged, the Committee noted that their analysis of vital economic variables suggests broad economic improvement over the rest of the year on sustained fiscal and monetary stimulus” they said.
However, the Committee expressed concerns about the broad level of increased security challenges in the country, which has undermined farmland activities and made the business environment more hostile.
The Committee believed a strong need for the monetary and fiscal authorities to continue to consolidate administrative measures to spur economic growth.
“We align with the Committee given the recent rally in oil prices, continued impact of government intervention on the agriculture and manufacturing sectors amidst improving domestic demand” the analysts said.
While the CBN estimates the 2021 real GDP growth rate at 3.50 per cent year-on-year, as the economy is expected to grow by 2.63 per cent.