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CBN retains lending rate at 12%

21 May 2014, 12:31

Abuja – The Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) has retained the lending rate (MPR) at 12 percent after its meeting on Tuesday in Abuja.

The Acting Central Bank Governor, Dr Sarah Alade, made the disclosure while briefing newsmen on the outcome of the meeting.

Alade said the committee after considering global economic indicators also retained Cash Reserve Requirement (CRR) of public sector fund at 75 percent and that of private sector at 15 percent.

“The committee unanimously voted to retain the current rate of the monetary policy and in addition, one member voted for an asymmetric corridor around the MPR.

“Consequently, the committee voted to hold the MPR at 12 per cent, keep the CRR on public sector deposits at 75 per cent and CRR on private sector deposits at 15 per cent," she said.

She said that the committee noted the mixed signals over the global growth prospects in the advanced, emerging and developing economies.

She added that the committee was satisfied with Nigeria's overall domestic economic environment which remained stable with inflation contained within the target range.

According to her, the committee has enjoined the management of the bank to continue to monitor developments in the fiscal space to ensure appropriate monetary policy actions.

On external sector developments, she said the Naira exchange rate remained stable at the Retail Dutch Auction System (RDAS) window and appreciated at the Interbank and the Bureau De Change (BDC) segments.

The acting governor said the exchange rate at RDAS during the period of March 26 to May 16 strengthened to N157.29 dollars from N157.30 dollars.

She said this represented an appreciation of N0.01k or 0. 01 per cent.

"At the Interbank Foreign Exchange market, the selling rate opened at N164. 65 to a dollar and closed at N162.33 to a dollar.

"This represented an appreciation of 1.41 per cent or N2. 32k.

"At the BDC segment, the Naira sold at N172 to a dollar on March 26, and closed at N167 to a dollar on May 16, indicating an appreciation of 2.91 per cent," she said.

Alade said that gross official reserves as at May 15, stood at $38.30 billion when compared to $37.40 billion in March and 42.85 billion dollars in December 2013.

She said that the current level of the country's external reserves could provide approximately nine months of imports cover.

Commenting on money, credit and financial markets developments, she said broad money supply (M2) increased by 1.94 percent in April.

She noted that the increase in money supply reflected the growth in the net domestic credit of 1.62 per cent in April.

On inflation, she said that it remained within the indicative benchmark target range of 6.0 to 9.0 per cent during the first quarter.

-    NAN

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