Rising from its 276th Monetary Policy Committee (MPC) meeting, Tuesday, November 24, the Central Bank of Nigeria (CBN) retained its benchmark interest rate for lending to the commercial banks at 11.75 per cent.
Disclosing this after the meeting, via a communiqué, the apex bank governor, Mr. Godwin Emefiele, said other parameters in the mould of Cash Reserve Ratio (CRR) and asymmetric corridor, also remain unaltered. This, he noted, was to prop up growth as the nation’s economy strives its way out of recession.
The communiqué emphasized that inflation remains influenced by structural policies, increase in price of petrol and of late, the #ENDSARS protest.
The Monetary Policy Ratio (MPR) was kept at 11.50 per cent, while the asymmetric corridor of +100/-700 basis points around the MPR and CRR was retained at 27.5 per cent, even as Liquid Ratio was also retained at 30 per cent.
The MPC had undertaken a rate cut of 100 basis points to 11.5 per cent when it last met in September.
Meanwhile, Nigeria’s local currency, the Naira, weakened against the United States Dollar on Tuesday with the over-the-counter spot market segment of the currency market (the Investors and Exporters (I&E) forex window, closing at 386, thus translating to a 0.04 per cent or 17 kobo drop from the rate of exchange at the close of trade on Friday, which was 385.83.
The local currency hit an intraday low of 394.83 against the Dollar before paring down losses to close at 386. Conversely, naira reached a high of 383 before falling to record the 386 close.
“Trade volume slumped by 31.5 per cent as liquidity worsened on account of limited dollar supply induced by the central bank’s move to ration the United States currency to conserve Nigeria’s foreign exchange reserves,” it informed, adding, “It however gained strength against the dollar on the parallel market at 483, relative to the 484 close it recorded at the previous session, data from abokiFX showed.
“I think that the CBN, by pushing the official foreign exchange rate from N306 to N379 to dollar, is in line with market demand.
Observed Aminu Gwadabe, President, Association of Bureau De Change Operators of Nigeria, “It has also helped to narrow the official-parallel market rates gap that formed the basis of ridiculous speculations among unpatriotic forex dealers and spectators.”
- Tags: MPC, CBN, Godwin Emefiele