By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE)- The Nigeria’s Central Bank Tuesday retained the monetary policy rate (MPR) at 12 percent (12%) consecutively for the fifteenth time following its monetary policy committee (MPC) held March 24-25 in Abuja Nigeria.
However, the MPC voted to increase cash reserve requirement (CRR) on private sector deposits by 300 basis points to 15%.
Sarah Alade, acting governor, of the CBN who read the communiqué said five (5) of the nine (9) members that attended the meeting voted to keep MPR at 1%, while four (4) members voted for an increase in MPR.
Seven (7) members voted to retain the MPR corridor at /-2%, and two members voted for an asymmetric corridor; seven (7) voted to increase CRR on private sector deposits by 300 basis points to 15%, while two (2) members voted to retain the CRR on private sector deposits at 12%.
According to the MPC, inflation has remained in the target range. The downward trend in inflation, which commenced in December 2012, continued up to February 2014.
It said the year-on-year (YoY) headline inflation fell consistently from 9.5% in February 2013 to 7.9% in November 2013, but rose marginally to 8.0% in December 2013 and January 2014.
While in February 2014, however, it moderated to 7.7%. ‘’The deceleration was largely due to the moderation in food inflation, which moved from 9.3% in January 2014 to 9.2 % in February 2014,’’ the MPC said.
The Nigeria’s monetary policy committee said core inflation, on the otherhand, exhibited a fair degree of volatility during the period; having declined up to the first half of 2013.
‘’It commenced an upward trend in the latter half of the period but declined to 6.6% in January 2014, before inching up to 7.2% in February 2014,’’ the MPC affirmed.
Sarah Alade, acting governor of Nigeria’s central bank said MPC members unanimously agreed that the continuation of a tight monetary policy was needed to consolidate recent gains.
The committee was however divided concerning what method to use to further tighten the economy.
