CBN shifts MPR, CRR but still ‘no devaluation’

After its two-day meeting on Tuesday, the Central Bank of Nigeria (CBN) monetary policy committee (MPC) has insisted that the naira will not be devalued.

Communicating the decision of the committee to reporters in Abuja, Godwin Emefiele, the CBN governor, said the bank would maintain its “development finance policy” of supporting the real sector of the economy.

The committee decided “to raise MPR (monetary policy rate) by 100 basis point from 11 percent to 12 percent, to raise CRR (cash reserve ratio) by 250 basis point from 20 percent to 22.15 percent, retain liquidity ratio at 30 percent”.

The bank blamed delay in passage of 2016 budget as part of the reasons for uncertainties and depression within the economy, urging the national assembly to hasten the passage.

It said one of the reasons for high inflation of 11.38 percent in the economy is the increase in the electricity tariff.

“The committee also urged speedy passage of the 2016 budget in order to halt the depressing effect of the uncertainty that engulfs the waiting period,” Emefiele said.

“Hoping that the implementation of the budget would go a long way boosting investors confidence and reinvigorating the financial market.”