CBN Projects 2.27% Economic Growth, Retains 13.5% MPR

The monetary policy committee (MPC) of the Central Bank of Nigeria (CBN), on Tuesday, retained the key lending rate at 13.5%.

 The CBN MPC made this known while briefing journalists shortly after committee’s meeting that held on Tuesday at the apex bank’s headquarters in Abuja, the nation’s capital.

Emiefele while reading the communique that contained the decisions of the committee said the CBN is not in a hurry to reduce MPR but targeting the reduction of inflation to a single digit.

“Given the happenings in the external sector and the fact that inflation is moderating, tightening of monetary policy should not be an option at this time as the restriction of the capacity of deposit money banks to create money will curtail their credit creation capability,” he said.

“While loosening will increase the money supply, stimulate aggregate demand and strengthen domestic production, the economy could be awash with excess liquidity especially if loosening drives growth in consumer credit without commensurate adjustment in aggregate output.”

The CBN MPC also retained the cash reserves ratio at 22.5 percent, liquidity ratio at 30 per cent; and the asymmetric window which was at +200 and -500 basis points around the MPR.

The committee, however, projected that at the end of 2019, the country’s economy would grow by 2.27% while inflation the rate will remain at 11.37%.

CBN uses the Monetary policy rate as a tool to keep inflation low and price stable.