By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE)-The Central Bank of Nigeria (CBN) at the end of Tuesday’s Monetary Policy Committee (MPC) meeting retained Nigeria’s benchmark interest rate at 11 percent and the foreign exchange rate unchanged despite businesses complaining about shortage of dollars for importation.
According to Godwin Emefiele the CBN governor, the 12 members of the MPC voted unanimously to keep the rate unchanged in the same vein, cash reserve ratio (CRR) for commercial banks was held at 20 percent. Also, retained were the asymmetric corridor of +200bps/-700bps around the Monetary Policy Rate (MPR).
According to him there had been no changes to the official naira rate to the dollar which has come under tremendous pressure due to a drying up of vital oil revenues.
Emefiele affirmed the MPC is committed towards achieving a stable exchange rate regime to ensure more flexibility for sustainable inclusive economic growth in the medium to long term.
As Deposit Money Banks in Nigeria have dollar shortages, companies doing business are forced to go to the parallel market to exchange a dollar N305 compared to the official rate of N197 as pegged by the CBN.
The Committee while acknowledging current global economic challenges and the domestic macroeconomic headwinds, concluded to foster its last decision (in November meeting) of pursuing real growth without losing sight of price stability.
The Committee also appraised the outcome of its November meeting and hinted that its fundamental aims are not yet actualised.
Also, in a bit to allow for a reasonable time lag to see the impact of its previous resolve, the Committee acknowledged and pointed out the need for more coordinated monetary-fiscal harmony, especially as it pertains to the fiscal authority’s economic roadmap for 2016.
