CBN: Banks To Continue Lending To Customers At 13.5%

The Central Bank of Nigeria (CBN) has voted to leave the Monetary Policy Rate (MPR) at 13.5% while other variables remain unchanged.

The CBN Governor, Godwin Emefiele, disclosed this at the end of the two-day final MPC meeting for 2019 held on Tuesday in Abuja.

 The MPR is the rate at which the CBN lends to commercial banks. This, in turn, serves as the benchmark rate which banks lend to customers.

The committee also voted to leave Cash Reserve Ratio (CRR) 22.5%, the Liquidity Ratio at 30% and the asymmetric corridor at Asymmetric +200 to -500 basis points.

Why the CBN left rates unchanged

Emefiele stated that the MPC left the rates unchanged for several reasons including the belief of the committee members that key macroeconomic indicators are trending in the right direction and also to sustain the improved growth in the Nigerian economy.

Emefiele also noted that the upward movement in inflation was expected.

“This was anticipated as part of the seasonal end of the year uptick in prices but was further accentuated by the border closure and expected temporary food supply shock which will adjust over the medium to long-term as the economy increases investments in food production.”

Recall that the CBN had confirmed that continued closure of the Nigerian land borders had pushed the inflation rate to 11.61% in October 2019 from 11.24 % recorded in September 2019, the highest in 17 months.