The Monetary Policy Committee of the Central Bank of Nigeria (www.cbn.gov.ng) has hold key rates, as leadership of the apex bank wants border to remain close.
The Committee left monetary policy rate (MPR) on hold at 13.5% on Tuesday, on the back of rising headline inflation which settled at 11.61% in October, 2019.
The Committee also left cash reserve and liquidity ratios unchanged at 22.5% and 30% respectively.
Godwin Emefiele, the Governor of the CBN said at news conference that the decision by the bank’s policy committee was unanimous.
He said the impact of the border closures on prices was “reactionary and temporary” and that the medium-term benefits of the government’s decision outweighed the short-term costs.
He stressed that he would advise the government to maintain the closures in the interests of boosting economic output, which has been recovering relatively slowly in the non-oil sector.
“In view of the uptick in inflationary pressures, (the MPC) decided that the balance of risks was in favour of protecting price stability,” Emefiele said.
Emefiele said a central bank decision to set a minimum loan-to-deposit ratio for lenders had helped lift economic growth to almost 2.3% in the third quarter, adding that the policy must be sustained as it had led to a drop in interest rates.
