CBN retains interest rate at 11.5%, other parameters for sixth consecutive time
By Kayode Tokede
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Tuesday retained the interest rate also called Monetary Policy Ratio (MPR) at 11.5 per cent for the sixth consecutive time.
The CBN Governor, Mr. Godwin Emefiele, presenting a communique from the MPC meeting, said the committee, through unanimous vote by nine members present, also decided to hold all other parameters constant.
The Cash Reserve Ratio (CRR) was, therefore, retained at 27.5 per cent, Liquidity Ratio at 30 per cent and the Asymmetric Corridor at plus 100 and minus 700 basis points around the MPR.
Emefiele said the recent developments in both global and domestic economy called for “cautious optimism.”
He said the domestic economy grew at 0.51 per cent during the first quarter compared to 0.11 per cent during the preceeding quarter.
He added that the MPC would continue to support the Federal Government in its effort to revamp the productive sector to accelerate economic diversification.
“The committee remains overwhelmingly committed to supporting efforts of the Federal Government in ensuring full restoration of the productive capacity of the Nigerian economy,” he said.
Emefiele assured that food inflation would be largely reduced during the new harvest season.
According to him, the committee noted the continued moderation in headline inflation (year-onyear) to 17.75 per cent in June 2021 from 17.93 per cent in May 2021, the third consecutive month of decline.
This, he said, “The decrease was attributed to a marginal decline in both the food and core components to 21.72 and 13.09 per cent in June 2021 from 22.28 and 13.15 per cent in May 2021, respectively.
“The MPC noted that, though, headline inflation remained well above the ceiling of the Central Bank’s 6-9 per cent corridor, it expressed optimism that the current interventions by the Bank in various sectors of the economy will further depress inflationary pressure as output growth improves and the negative output gap closes.”
He expressed in the communiqué that aggregate credit at end-May 2021 stood at N24.23 trillion, compared with N22.68 trillion at end-December 2020.
“This represents a year-to-date increase of N1.55 trillion. Under the Bank’s development finance initiatives, the Bank granted N756.51 billion to 3,734,938 small holder farmers cultivating 4.6 million hectares of land, of which N120.24 billion was extended for the 2021 Wet Season to 627,051 farmers for 847,484 hectares of land, under the Anchor Borrowers’ Programme (ABP); for the Agribusiness/Small and Medium Enterprise Investment Scheme (AGSMEIS), the sum of N121.57 billion was disbursed to 32,617 beneficiaries; and for the Targeted Credit Facility (TCF), N318.17 billion was released to 679,422 beneficiaries, comprising 572,189 households and 107,233 Small and Medium Scale Enterprises (SMEs).
“Under the National Youth Investment Fund (NYIF), the Bank released N3.0 billion to 7,057 beneficiaries, of which 4,411 were individuals and 2,646 SMEs.
“Under the Creative Industry Financing Initiative (CIFI), N3.22 billion was disbursed to 356 beneficiaries across movie production, movie distribution, software development, fashion, and IT verticals.
“Under the N1.0 trillion Real Sector Facility, the Bank released N923.41 billion to 251 real sector projects, of which 87 were in light manufacturing, 40 in agrobased industry, 32 in services and 11 in mining.
“On the N100 billion Healthcare Sector Intervention Facility (HSIF), N98.41 billion was disbursed for 103 health care projects, of which, 26 are pharmaceuticals and 77 are in the hospital services.
“Similarly, the sum of N232.54 million was disbursed to 5 beneficiaries under the CBN Healthcare Sector Research and Development Intervention (Grant) Scheme (HSRDIS) for the development of testing kits and devices for Covid-19 and Lassa Fever.
“On the National Mass Metering Programme (NMMP), N36.04 billion was disbursed to 17 Meter Asset Providers, to nine DisCos, for the procurement and installation of 657,562 electricity meters.
“On the Nigerian Electricity Market Stabilization Facility – 2 (NEMSF-2), the CBN released N120.29 billion to 11 DisCos, to provide liquidity support and stimulate critical infrastructure investment needed to improve service delivery and collection efficiency.”
