Contrary to expectations, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Tuesday left all key monetary policy rates unchanged.Amid the growing impact of COVID-19 on the global and the Nigerian economy, many financial experts had expected the monetary policy rates to be reviewed in an attempt to reinvigorate the Nigerian economy.
But, at the end of the Monetary Policy Committee (MPC) meeting in Abuja, on Tuesday, members resolved to retain the monetary policy rate (MPR), or the controlling lending rate, at 13.5 per cent, with the asymmetric corridor at +200/-500 basis points around the MPR.
The CBN governor, Godwin Emefiele, who read the communique at the end of the meeting, said the MPC also resolved through a unanimous vote to retain the Liquidity Ratio at 30 per cent, while Cash Reserve Requirement (CRR) was left unchanged at 27.5 per cent.
Mr Emefiele said the decision of the committee to retain the controlling rates were informed by the need to observe the impact of steps already taken under a massive intervention plan to save the economy from COVID-19 pressures.
“Any attempt to adjust the monetary policy fundamentals in any direction – upwards or downwards – will distort and undermine the effort already made through the recent N3 trillion stimulus plan by the Central Bank,” Mr Emefiele said.
He said the impact of COVID-19 was not only capable of plunging the world into a health crisis, but also instigating a major economic crisis.Just recently, the apex bank unveiled the first set of interventions to cushion the negative impact of the deadly coronavirus on Nigerian businesses and the economy.
The bank governor said the interventions included a cut in the interest rates of all applicable CBN intervention facilities from 9 per cent to 5 per cent per annum effective March 1, 2020.
Also, the intervention included the creation of N50 billion targeted credit facility for small and medium scale enterprises as well as households impacted by the COVID-19 pandemic.
The apex bank also announced a grant of a further moratorium of one year on all principal repayments, particularly intervention loans, effective March 1, 2020.