Despite worsening recession, Nigeria’s Central Bank keeps monetary policy rates unchanged

CBN

The Central Bank of Nigeria (CBN), on Tuesday opted to retain all monetary policy instruments, despite the report by the National Bureau of Statistics, NBS, on Monday that the country’s economy sunk deeper into recession.

The Monetary Policy Rate (MPR), which sets the lending rate for banks and businesses for a period, was left at 14 per cent, while the Cash Reserve Ratio, CRR, was retained at 22.5 per cent.

The CRR sets the specified minimum fraction of customers’ total deposits commercial banks could hold as reserves either in cash or deposits with the CBN.

The Central Bank governor, Godwin Emefiele, said at the end of the two-day Monetary Policy Committee, MPC, meeting in Abuja that the liquidity ratio was left by the MPC at 30 per cent, with the symmetric window kept at +200 and -500 basis points around the MPR.

The NBS in its gross domestic product (GDP) report for the third quarter said the country’s recession deepened, with the economy contracting further by 2.24 percent year-on-year basis, from 2.06 slump in the second quarter.

Last week, the NBS said that inflation for October 2016 rose by 18.3 per cent (year-on-year) from 17.9 per cent recorded in September.

The CBN appears to be fighting on several fronts at the same time, with dollar scarcity as a result of the currency restriction policies of the bank driving the exchange rate of the Naira to soar against other international currencies like the dollar.

Details later…


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  • Dr Pat Kolawole Awosan

    CBN monetary policy makers led by the CBN governor Godwin Emefiele, are Nigerian-enemies within whose ultimate goals are to keep Nigerians in perpetual impoverishment in order to ensure the commercial banks keep recording huge quarterly profits as Godwin Emefiele, being a former commercial bank CEO only care about the welfare of commercial banks in the country not Nigerian-people,s welfare.Hence,Emefiele, keeps interest rate at 14% high to ensure Nigeria, does not come out of the deep economic recession.

    • Höly Wähala

      Read your disjointed grammar and punctuations, and remove the fake “Dr” from your moniker… you are a disgrace to academia. Writing trash about a topic beyond your mental capacity.

      • John A

        Kolawole is a native doctor, he specializes in (agbo) and other traditional medicine.
        These people always carry the initial of Dr, professor, prince and princes.
        The Dr in his name doesn’t mean a trained medical doctor.

    • Sharp Sharp

      Whoa !! The dustbin was so full they had to drag you out of the sewage !! Yaribat your jealousy of Ndigbo is becoming obsessive !! Bounce moron

  • Dele Awogbeoba

    The decline of the Nigerian economy started with the policy of this CBN towards currency controls under GEJ in Dec 2014. JPM warned Nigeria in February 2015 (before Buhari came to power)that it stood to be ejected from its JPM index and would lose billions of dollars of FDI because of it if it failed to reverse its currency control policy.

    www[dot]bloomberg[dot]com/news/articles/2015-02-05/nigeria-woes-deepen-as-jpmorgan-hits-emefiele-with-debt-warning

    JPM later evicted Nigeria from its index. That same policy prevented many manufacturers and businesses from accessing dollars from official sources and caused mass migration to the black market. Additionally, the CBN stopped (in January 2016) giving dollars to the BDC so they had insufficient dollars for the needs of industry.

    www[dot]vanguardngr[dot]com/2016/01/cbn-stops-sale-of-forex-to-bdcs/

    Result….massive fall in the value of the Naira in the black market and the importation of massive inflation within Nigeria. Once massive inflation ensued because of CBN policy, the CBN then embarked on raising interest rates (thereby putting further adverse pressure on businesses and borrowers) in July 2016 to combat the very problem signed sealed and delivered by the CBN.

    www[dot]thecable[dot]ng/breaking-cbn-hikes-interest-rates-to-10-year-high

    Just as the CBN was forced to change its policy of currency controls about 2 years after the adverse effect of that policy on Nigeria so also the CBN reversed its policy to starve the BDC of dollar funding in July 2016

    www[dot]vanguardngr[dot]com/2016/06/naira-depreciation-cbn-resumes-dollar-sales-bdcs/

    once it became clear that that policy was the fuel for the runaway inflation experienced in Nigeria.

    • Olusola

      so what now stopped PMB from suspending or sacking him citing grosss incompetence and appointing an acting until Saraki and his 40 thieves will decide on what to do.

      • Dele Awogbeoba

        May be because the law states that 2/3 of the senate must approve before it can be given effect to or because he is too daft to know that he is being sabotaged by Emefiele or because he is respecting the powers given by law to the CBN governor and has chosen not to interfere with the powers of the CBN as given by the CBN Act of 2007. Your guess is as good as mine. Whatever may be the case, PMB and the Nigerian masses are the ones bearing the brunt for the actions of the Emefiele led CBN.