CBN warns of another looming recession

The Monetary Policy Committee (MPR) of the Central Bank of Nigeria (CBN) on Tuesday warned that the economy may recede again into recession unless concrete steps were taken to implement the 2018 budget, create employment and increase the minimum wage.

This is just as seven of the 10 members that attended voted to retain all the policy rates including Monetary Policy Rate (MPR) at 14 per cent; Liquidity Ratio at 30 per cent; Cash Reserve Ratio (CRR) at 22.5 per cent; and Asymmetric Corridor of +200 and -500 basis points around the MPR
Briefing journalists on the outcome of the meeting which held on Monday and Tuesday, Governor of CBN, Mr Godwin Emefiele said “the committee was concerned that the exit from the recession may be under threat as the eco0nomy slowed to 1.95 and 1.50 per cent during the first and second quarters of 2018 respectively.

“The committee noted that the slow down emanated from the oil sector with strong linkages to unemployment and growth in other key sectors of the economy.

“In this regard, the committee urged the government to take advantage of the current rising trend in oil prices to rebuild fiscal buffers, strengthen government finances in the medium term and reverse the current trend of decline in output growth.”

According to him, MPC noted that “though growth remains weak, the effective implementation of 2018 Federal Government budget and policies that would encourage credit delivery to the real sector of the economy may boost aggregate demand, stimulate economic activity and reduce unemployment in the country.