CBN retains MPR at 13%, CRR at 31%
- nationalpilot
- Jul 27, 2015
- 2 min read
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), on Friday, retained the Monetary Policy Rate (MPR) at 13 per cent; as well as retained the Credit Reserve Ratio (CRR) at 31 per cent and also retained the symmetric corridor of 200 basis points around the MPR.
This formed part of the communiqué issued at the end of a two-day meeting of the committee in Abuja.
The CBN Governor, Godwin Emefiele, who read the communiqué said, “In consideration of the underlying fundamentals of the economy, the evolving international economic environment, developments in oil prices as well as the need to allow for the unveiling of the economic agenda of the Federal Government, the Committee decided by a vote of 8 to 4 to retain the Monetary Policy Rate at its current level of 13 per cent, by a unanimous vote to retain the CRR at 31 per cent while four members voted to remunerate the CRR.”
He explained that to arrive at the decisions, the committee considered and expressed concerns about the trends in key macro-economic indices in the first half of 2015.
Emefiele added that the committee acknowledged the absence of easy choices in the circumstance but monetary policy alone is limited, and would require urgent complementary fiscal policies to define the path of growth and create the basis for stabilisation.
“On the external front, the adverse effect of the protracted decline in global crude oil prices on the fiscal position of government is becoming increasingly obvious. The expected policy normalisation in the US could accentuate capital flow reversals from emerging and developing economies and further tighten global monetary conditions, thus exerting greater pressure on exchange rates in those countries,” he said.
“Given the choice between controlling either quantity or price, the limitations on choosing quantity were evidently necessitating the need to employ some flexibility around price while allowing current demand management measures to fully work their way through the economy. However, the Committee noted that financial system stability considerations placed key limitations on the extent of considering price flexibility, creating a compelling need to balance measures to address the current vulnerabilities.”
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