By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-Nigeria’s central bank on Tuesday maintained interest rate at 13 percent and cash reserve requirement (CRR) at 20 percent by 500 basis points in November.
Also, the Central Bank of Nigeria (CBN) retained public sector CRR at 75 percent. This is coming on the heels of the Monetary Policy Committee (MPC) meeting held January 29 to 20th in Abuja Nigeria and ignoring of calls to further devalue the naira for the second straight time.
At the MPC meeting 11 members voted in favour of retaining the Monetary Policy Rate (MPR) at 13 percent, private sector CRR at 20 percent, public sector CRR 75 percent and liquidity 30 percent.
The MPC expressed satisfaction with Nigerian economic growth and the December 2014 inflation print and said they were satisfied with the current pricing of the Nigerian local currency the naira compared to the United States dollar.
Some of the risks negatively affecting the nation’s economy are the worsening insurgency and its impact on farming activities and food supply.
Also, the persistent drop in the prices of crude oil and its impact on reserve accretion, coupled with the reoccurring excess liquidity in the banking system.
“Normalisation of monetary policy in the U.S which could lead to portfolio retrenchment in emerging markets, including Nigeria,” a Cordros report said.
