By Chika Otuchikere
The Central Bank of Nigeria(CBN) has announced the reduction of Monetary Policy Rate(MPR) from 12.5% to 11.5%.
The Governor of the Central Bank of Nigeria (CBN) Mr Godwin Emefiele made this known while reading the communiqué at the end of the Monetary Policy Committee (MPC) meeting in Abuja on Tuesday.
Emefiele said the MPC retained CRR at 27.5%, stating that the recent inflationary pressures are not driven by monetary policies, but as a result of structural policies.
Highlights of the MPC’s decision include the reduction of the MPR by 100 basis points, from 12.5% to 11.5%, adjustment of asymmetric corridor, from +200/-500 to +100/-700 basis points around the MPR, the retention of both Cash Reserve Ratio (CRR) and Liquidity ratio at 27.5% and 30% respectively.
The governor noted that the Committee reviewed the choices before it, against the backdrop of its primary mandate of price stability, and the need to support the recovery of output growth.
The Committee, therefore, resolved that the likely action aimed at addressing the rise in domestic prices would be to tighten the stance of policy, saying this will not only moderate the upward pressure on prices, but will also attract fresh capital into the economy, and improve the level of the external reserves.