By Kayode Tokede
The Central Bank of Nigeria (CBN) is set to hold its second Monetary Policy Meeting (MPC) by next week’s Monday and Tuesday.
The first meeting was held January 25-26 and the second this month is the 278th meeting of the monetary policy of the apex banking regulating body.
The MPC is held to facilitate the attainment of price stability and to support the economic policy of the Federal Government.
The meeting held in January witnessed members voted unanimously to retain the Monetary Policy Rate (MPR) at 11.5 per cent.
Governor of the CBN, Mr. Godwin Emefiele while reading the communiqué from the MPC said members also agreed to retain Cash Reserve Ratio (CRR) at 27.50 per cent, Liquidity Ratio at 30 per cent and the Asymmetric Window at plus 100 and minus 700 basis points around the MPR.
All prevailing rates were equally agreed on during the last MPC meeting on Nov. 24, 2020.
The CBN governor said the committee was confronted with policy choices, either to aggressively reverse inflationary pressure in the country or support measures aimed at enhancing growth and reversing the current economic recession.
“MPC agreed to reverse the inflationary trend and pursue price stability in the growing economy. MPC opined that an aggressive expansionary measure may worsen inflation and result in negative consequences on the exchange rates.
“On this basis, MPC agreed to hold all basic parameters constant. “MPC was of the view that the CBN should pursue its strategy of systematic synchronisation of monetary and fiscal policy accommodation through its development finance initiatives aimed at mitigating the impact of the COVID-19 pandemic on Nigerians,’’ he said.
Emefiele added that the committee encouraged the Federal Government not to consider another wholesale lockdown of the economy so as not to reverse the gains of the various economic stimulus packages provided in 2020.
“It also encouraged the CBN to improve credit facilities to households, Micro, Small and Medium Enterprises (MSMEs), the health sector as well as the agriculture and manufacturing sectors,’’ he said. He added that such a move was expected to increase manufacturing output and improve the GDP.