CBN maintains interest rate at 14%, CRR 22.5%

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has retained the benchmark interest rate at 14 per cent on and maintained existing Cash Reserve Ratio (CRR) for Deposit Money Banks (DMBs) at 22.5 percent, the apex bank Governor, Mr. Godwin Emefiele disclosed on Tuesday.

Rising from its two-day meeting, which was the sixth and the last in 2016, the committee, as analysts predicted, decided to retain all the economic indices unchanged, so as to resuscitate growth in the country’s economy which is in its first recession in 25 years, and at the same time keeping an eye on the nation’s high inflation status.

The CBN left its main lending rate unchanged for a second consecutive meeting as it tries to balance the needs of an economy that’s shrunk every quarter this year with an inflation rate that’s at the highest in more than a decade.

Emefiele told reporters on Tuesday in Abuja: “The risks to the economy remain highly elevated on two fronts: price and output,” Emefiele said. “However, considering the importance of price stability, and being mindful of the limitations of monetary policy in influencing output and employment, the committee decided unanimously in favour of retaining the current stance.”

The nation’s Gross Domestic Product (GDP) shrunk 2.2 per cent year on year in the three months through September, marking its third consecutive quarter of contraction, the National Bureau of Statistics said Monday. Inflation accelerated to 18.3 percent, the highest rate in 11 years, in October as exchange-rate weakness persisted on the prices of goods and services.