At the end of the two days meeting of the Central Bank of Nigeria (CBN) monetary policy committee (MPC), the members decided to still hold the key interest rate, which serves as the national lending rate, at 14 percent. CBN Godwin Emefiele disclosed on Tuesday in Abuja.
He said the committee considered holding the rates because it would allow more clarity for the economy. The committee also attributed the high food index to attacks on farmers by herdsmen and flooding in some parts of the country.
“The committee noted that the negative real interest rates did not support the recent flexible foreign-exchange market as foreign investors’ attitude had remained lukewarm, showing unwillingness in bringing in new capital,”
“The MPC was further concerned that while the situation called for obvious tightening of the monetary policy stance, the technical recession confronting the economy and the prospects of negative growth to year-end needed to be factored into the policy parameters.” Cash reserve ratio (CRR) and liquidity ratio were maintained at 22.5 percent and 30 percent respectively.