The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on has left the monetary policy rate unchanged at 14 per cent.
The CBN Governor, Mr Godwin Emefiele, who was speaking at the end of the two-day meeting of the committee in Abuja.
He said that the committee also retained the cash reserves ratio at 22.5 per cent.
He announced that the liquidity ratio was left at 30 per cent; and the asymmetric window kept at +200 and -500 basis points around the MPR.
According to Mr Emefiele, the economy was on the right path but some key sectors continued to experience significant challenges.
“The MPC, however, expressed concern about the tepid growth expectations and growing uncertainty in the global financial markets.
“These uncertainties are arising from the poor reception of the Brexit deal by British politicians, continuing trade war between the U.S. and her major trading partners, as well as the commencement of U.S. sanctions on Iran.”
He further stated that the committee believed that although the domestic economy was recovering modestly from the recession, the recovery was tepid and called for more efforts to strengthen the output and demand.
The Senate has directed its committee on banking to screen the nominees for the appointment of members of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) as well as the nominee for the position of the Deputy CBN governor.
The nominees are Prof. Adeola Adenikinju, Dr. Aliyu Sanusi, Dr. Robert Asogwa and Dr. Asheikh Maidugu.
While the nominee for the position of Deputy Governor is Aisha Ahmad.
President Buhari had earlier sent the names of four nominees for appointment as members of the MPC and CBN Deputy Governor to the Senate for confirmation, which they rejected.
But on Tuesday, the Senate reversed its earlier decision not to screen the nominees after a Federal Lawmaker Senator Rafiu Ibrahim, appealed to the lawmakers to confirm the nominees for the position of Deputy Governor of CBN and members of the Monetary Policy Committee of the CBN.
He explained that MPC has been unable to hold its meeting because it does not have the required number of members to form a quorum and this has had adverse effects on the economy.
Investment and securities trading firm, FBN Quest says ”There is reputational damage to Nigeria” as the January 2018 Monetary Policy Committee meeting of the Central Bank was cancelled due to the Senate’s refusal to confirm presidency’s new nominees.
In an investment note released on Monday, FBN Quest says the MPC meeting would have kept monetary policy variables unchanged, but note the modest decline in core inflation to 12.1 percent in December.
FBN Quest says the CBN MPC has one shared agenda to fight against inflation, and that the December inflation report ”probably came as a welcome surprise” at 15.4 percent, down from 15.9 percent in November.
Amidst news about Nigeria’s exit from recession, the Central Bank Governor (CBN), Godwin Emefiele has called for the implementation of policies that will sustain Nigeria’s economic growth due to the fragile state of the growth.
This call was made during the Monetary Policy Committee (MPC) bi-monthly meeting on Tuesday.
During the meeting, the CBN Governor said the committee applauded Nigeria’s exit from recession but the growth needs to be sustained as it is fragile.
“Committee applauded the exit of the Nigerian economy exit from recession but observes that the growth remain fragile and therefore hopes that complimentary fiscal and monetary policies would sustain the growth momentum.”
Also, the MPC during the meeting opted to leave the interest rates unchanged and focus on the slow economic growth in spite of the country’s exit from recession.
Due to the need to encourage liquidity of Nigeria’s economic system, the MPC retained the basic interest rate at 14 percent.
Emefiele during the meeting said the MPC is satisfied with the Federal Government’s directive that all state governors should pay outstanding salaries.
He said, “MPC also noted with satisfaction, the directive of the Federal Government to all states to promptly pay outstanding salary arrears in order to boost aggregate demand.
“It commended efforts to clear outstanding contractor arrears, prompt settlement of trade disputes with certain unions of organized labours, including the Academic Staff of Universities (ASUU) and health workers, as well as the of money to settle outstanding entitlement of the extra workers in defunct Nigerian Airways.”