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Monetary Policy Committee of CBN Maintains Status Quo on Rates

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The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), faced with the choice of reducing or leaving policy parameters unchanged – unanimously elected to maintain the status quo by keeping all monetary policy metrics at current levels.

The Committee members on Tuesday maintained Monetary Policy Rate (MPR) at 13.5per cent; Asymmetric corridor around the MPR at +200/-500bps; Cash Reserves Ratio (CRR) at 27.5per cent; and Liquidity Ratio (LR) at 30per cent.

The Committee considered developments in the global and domestic economy since its last meeting including (1) the negative impact of COVID-19 on global growth, (2) Dovish global central banks’ responses to the COVID-19, and (3) rapid pace of decline in global oil prices.

On the domestic front, the Committee noted (1) sustained inflationary pressure (February: +7bps to 12.20per cent y/y), (2) weaker oil earnings due to lower oil prices, and (3) recent volatility in the FX market amid declining external reserves.

 

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