CBN Retains Interest Rate At 11.5%, Directs Banks To Increase Agric Lending

The Central Bank of Nigeria has retained the interest rate at 11.5 per cent and other parameters, saying the policies have yielded positive results.

The apex bank’s Governor, Godwin Emefiele, revealed the decision at the 276th Meeting of the Monetary Policy Committee in Abuja.

Emefiele said the Committee focused not only on price stability, but the need to drive the country out of recession.

The decision by the apex bank follows the second contraction of the Nigerian economy by 3.62 per cent, down from the 6.1 per cent fall in the second quarter of the year.

The committee had in the last meeting cut interest rate by 100 basis points to 11.5 per cent, a decrease from the 12.5 per cent previously held.

The MPC in its last meeting held that traditional monetary policy approach was not enough to curb Nigeria’s risning inflation and sliding GDP.

But the governor said at 17.38 per cent, food inflation is expected to moderate with the commencement of harvest.

He said the inflation is supply side driven particularly on agricultural products, electricity and fuel price hikes.

The CBN Governor said the MPC noted improvement in the different sectors of the economy mostly in the manufacturing sector and the financial service sector.

On its outlook for the economy, he said the economy is expected to recover by 2020, while urging financial institutions to increase its credit to the agricultural sector.

The apex bank in its decision retain the asymmetric corridor of +100/-700 basis points around the MPR and retain the Cash Reserve Ratio at 27.5 per cent, while the Liquidity Ratio was retained at 30 per cent.