The Monetary Policy Committee (MPC) of the Central Bank of Nigeria has voted to retain its Monetary Policy Rate at 14 percent.
According to Central Bank Governor, Godwin Emefiele, other important decisions reached by the committee include to retain the CRR at 22.5 percent, retain the asymmetric corridor at +200/–500 basis points and to maintain Liquidity Ratio at 30 percent.
The rate decision was expected by a number of economists. Bismarck Rewane, managing Director of Financial Derivatives Limited, speaking to business news television station, CNBC Africa acknowledged that the decision was expected while pointing to the constraints which still exist in the local foreign exchange market.
Emefiele who pointed to the challenges facing the apex bank in meeting its monetary policy objectives drew attention to the challenges which the Nigerian economy is facing. Among other considerations Emefile said “the monetary policy committee put into consideration the fragile market conditions and strong headwinds facing the Nigerian economy, the yet to be unveiled uncertainties in BREXIT and the anticipated changes in U.S. policy and growth.”
The governor also acknowledged the crackdown on parallel market traders who have violated the provisions of the CBN by the officials of the Department of State Services (DSS).
According to Emefiele, the foreign exchange regulation in the country forbids trafficking in currency.
He said that the DSS had the rights to enforce the law and make sure that currency hawkers were forced out of the “illegal trade.’’
The governor, who noted that it was demeaning for traders to hawk currency on the streets, urged the traders to legitimise their business by applying for Bureau De Change (BDC) licence.
At its 19th and 20th September 2016 meeting the Monetary Policy Committee voted to retain the MPR by 200 basis points to 14.0 percent, retain the CRR at 22.5 percent, retain the asymmetric corridor at +200/–500 basis points; and retain Liquidity Ratio at 30 percent.