The monetary Policy Committee (MPC) of Central Bank of Nigeria (CBN) rose from its 264th meeting Thursday to announce retention Monetary Policy Rate (MPR) at 14 per cent along with all the other base rates.
These include Asymmetry Corridor at +200-500 basis points around MPR, Cash Reserve Ratio (CRR) at 22.5 per cent and Liquidity Ratio at 30 per cent.
Reading the communique of the meeting, CBN Governor, Mr. Goodwin Emefiele said the decision to hold the rates was unanimously agreed upon by al the 11 members.
According to him, the decision to hold was also an expression of confidence in the direction of the economy which he describe its outlook as positive.
While answering questions later, the Governor warned banks to be careful about aiding money laundering activities of some politicians as 2019 elections moves closer.
On ordinary lending to politicians for election purposes, Emefiele said banks had their guidelines governing lending and should not circumvent them during this electioneering season.
Reviewing the economy in the last two months, MPC noted that “credit to the private sector grossly under-performed below the 2018 benchmark of 12.4 per cent.
“The under performance of the monetary aggregate was of concern to the MPC, which impressed it on CBN to ensure credit delivery to the small and medium scale enterprises.”
The committee advised Nigerians to look out for increase in inflation rate in the coming months due to anticipated election spending end of year spending, high cost of energy, flooding, farmers/herdsmen crisis arguing that reduction in inflation figures seen in October was unsustainable.
MPC urged fiscal authorities to work towards containing these menace and sustain implementation of the 2018 budget, Economic Recovery and Growth Plan (ERGP) of the Federal Government to ameliorate the supply side constraints.
“Improvement in productivity in the oil and non-oil sectors are also expected to drive output growth in the medium term.
“The committee however, acknowledged the downside risks to this outlook to include absence of fiscal buffers, low domestic credit and weak aggregate demand.”
MPC also said improvement in security, improved harvest, as well as stable exchange rate are expected to moderate inflation.
“Overall, the outlook for the economy remains positive with a growth projection of 1.75 percent in 2018.”