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CBN retains 12 percent lending rate

23 July 2014, 10:18

Abuja - The Monetary Policy Committee (MPC) has retained the Monetary Policy Rate (MPR) or lending rate of 12 per cent.

The Central Bank Governor, Godwin Emefiele, made this known when he briefed newsmen on the outcome of the MPC meeting in Abuja.

Emefiele said that the 12 per cent retention was a unanimous decision of the committee.

“The committee decided by a unanimous vote to retain the current stance of monetary policy with one member voting for an asymmetric corridor around the MPR.

“Consequently, the Monetary Policy Committee voted to retain the MPR at 12 percent with a corridor of plus-minus 200 basis points around the midpoint.

“The committee also retained the liquidity ratio at 30 percent, while Public Sector Cash Reserve Requirement and Private Sector Cash Reserve Requirement, was  retained at 75 and 15 percent, respectively,’’ he said.

Emefiele said that the committee was satisfied with relative stability in the macro-economy as reflected in the impressive growth rates, stable consumer prices and exchange rate.

According to him, the committee is concerned about the weak translation of stability to macroeconomic gains in employment and access to finance by Small and Medium Scale businesses.

“It, therefore, emphasised the need for MPC decisions to take into account the long run impact on unemployment level, wealth creation and growth of businesses.

The CBN governor said the committee noted that gas to power remained a binding constraint in reaping the benefits of the recently concluded power sector reforms.

He added that the committee further expressed concern about the liquidity level and the tendering uptick in inflation.

Emefiele said this might not be connected with poor harvest in some agricultural producing areas, particularly in the North-East and North-Central states of the country.

On Inflation, he said the committee noted that the policy direction for inflation, exchange and interest rate must be seen not only in the context of price and financial stability.

The governor said that the policy should also help to enhance the quality of life of Nigerians and promote employment generation.

On external sector development, Emefiele said that all segment of the foreign exchange market witnessed a considerable degree of stability during the period.

-   NAN

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