The Central Bank of Nigeria (CBN) yesterday retained all rates for the 16th month after a decision to move the nation’s benchmark interest rate from 13 per cent to 14 per cent in July 2017.The rates retained are the Monetary Policy Rate (MPR) at 14 per cent; Cash Reserve Requirement, 22.5 per cent; and Liquidity Ratio at 30 per cent, with the asymmetric corridor also steady at +200 and -500 basis points around the MPR. CBN Governor, Godwin Emefiele, had hinted recently that although rate easing may be imminent, it would only be at the right time, adding that this time is not a time to take chances. But yesterday, Emefiele, while presenting the communiqué of the Monetary Policy Committee, raised concerns about potential adverse external developments and the cautious lending and financial intermediation by commercial banks.He said that while loosening the rates would strengthen and stimulate consumptions through reduced cost of borrowing, it could also aggravate the fragile consumer prices and generate exchange rate pressures. He said that developments in output and inflation at present require effective and close monitoring to gain clarity on the optimal path of monetary policy direction in the medium term, hence the committee members opted for more time. “With inflation in Nigeria at 15.91 per cent, there is a suspicion that the CBN may be waiting for a more sustained decline before moving ahead with rate cuts to support economic growth.“As the year slowly comes to an end, investors will continue to observe Nigeria’s hard economic data and inflation figures for hints as to when the CBN might act in 2018,” he said.

Source: The Guardian November 22, 2017 03:56 UTC