By Babajide Okeowo
Rising from the 283rd meeting of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria, the Committee on Tuesday retained the Monetary Policy Rate (MPR) at 11.5% and kept all other parameters unchanged.
CBN Governor, Godwin Emefiele made the announcement while addressing journalists at the bank’s headquarters in Abuja.
The MPR, which has remained unchanged for months, is a powerful tool for regulating interest rates in the economy.
Throughout 2021, the committee also held MPR constant.
“The MPC feels a hold will signal its realization of the fragility of the growth recovery and its sensitivity to emerging global and domestic uncertainties. Hence, the need to sustain policy trajectory,” Emefiele said.
“After a careful balancing of the benefits and downsides of each policy ratio, the MPC decided to hold all policy parameters constant.”
He said the committee believed that the existing monetary policy stance has supported the growth recovery and should be allowed to continue for a little longer for consolidation to achieve the MPC mandate of price stability that is conducive for sustainable growth.
The committee also felt that a hold stance would enable it to carefully appraise the implications of the unfolding global development around policy tapering and normalization by advanced economies.
They observed that inflation in most developed and emerging economies remains high, driven by persistent exchange rate fluctuations and supply bottlenecks.
The committee noted that the increase in the country’s inflation rate in December 2021 is attributable to increased demand during the yuletide, suggesting that the uptick in the numbers could be a temporary development.
In December 2021, surging food prices pushed inflation to 15.63 percent — the first increase after 8 months of decline.
According to Emefiele, the members are of the view that inflation will moderate further going into the new year, driven by the significant interventions in the agricultural sector.
The CBN MPC highlighted that the Nigerian economy is expected to continue with positive growth following the impressive growth recorded in the third quarter of 2021, reflecting continuous recovery from the recession.