The Monetary Policy Committee of the Central Bank of Nigeria has voted to retain the benchmark interest rate at 11.5%, whilst keeping all other monetary parameters constant.
This was disclosed by the Governor of CBN, Godwin Emefiele, while reading the communique at the end of the monetary policy committee meeting on Friday, 17th September 2021.
Highlights of the Committee’s decision
MPR retained at 11.50%
The asymmetric corridor of +100/-700 basis points around the MPR was retained
CRR was retained at 27.5%
Liquidity Ratio was also kept at 30%
The committee noted the improvement in the manufacturing and non-manufacturing PMIs, which increased to 46.9% each from 46.6% and 44.8% recorded in July 2021. The improvement was largely attributed to an increase in new order and rising demand as well as further growth in economic activities in the country.
The monetary policy committee noted that continuous intervention in the agricultural sector will help to increase food production in the country, hence moderating the food inflation further, as the current level is still well above the bank’s benchmark.
The committee urged Nigerian banks to increase credit to the economy in order to improve output growth of the economy.
What this means
The continuous retainment of the benchmark interest rate at 11.5% is in furtherance of the apex bank’s effort to bolster Nigeria’s economic growth through the expansion of credit to the real sector.