23/5/2017/Cordros Research
At the end of its 256th meeting (third this year), the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) voted unanimously to maintain status quo by retaining the:
- Monetary Policy Rate (MPR) at 14.0%;
- Asymmetric corridor around the MPR at +200/-500bps;
- Cash Reserves Ratio (CRR) at 22.5%; and
- Liquidity Ratio (LR) at 30.0%.
The Committee considered developments in the global and domestic economy since its last meeting including (1) gradually rebounding global growth, (2) further contraction in the economy (GDP contracted by 0.52% y/y in Q1-2017), (3) lower-than-expected drop in April inflation (at 17.24% y/y), suggesting that prices remain largely sticky downwards, and (4) relative improvement in the forex space, heralding notable appreciation of the naira exchange rate. Indeed, the risk facing the domestic economy remains in two folds (i.e. price and output).
The MPC reiterated its commitment to price (including exchange rate) stability while (1) allowing the current policy configuration to fully achieve its intended objective, and (2) closely monitoring domestic and external developments that could shape subsequent decisions.
The Committee’s decision came in line with consensus, as shown by a Bloomberg-compiled median estimate of 14.0% for the MPR.
In attendance were eight out of twelve members of the Committee.
