The Central Bank of Nigeria has yet again retained its benchmark rate at 11.5 per cent, and other key monetary policy parameters.
The CBN governor, Godwin Emefiele, announced this on Tuesday after the Monetary Policy Committee meeting.
Addressing journalists after the first meeting of the year 2022, Mr Emefiele announced that the committee unanimously retained key rates, with the assymetric corridor of +100/-700 basis points around the MPR.
The benchmark rate is the rate at which the central banks lends to banks, which therefore determines the rate at which commercial banks lend money to businesses and individuals.
It is used to control money supply in the economy, with a direct implication for economic growth and stability of prices.
The committee also voted to retain the Cash Reserve Ratio (CRR) at 27.5 per cent as well as the liquidity ratio at 30 per cent.
The committee said it held the parameters in the hope they will support growth and boost production, which would ultimately rein in inflation in the short to medium term.
“In its determination as to whether to hold or loosen or tighten its policy stance, the MPC was mindful that, whereas the US and some Advanced Economies have signaled their intention to commence policy normalisation which may result in capital flow reversal for EMDEs, the major focus at these climes were targeted mainly at reining in the high level of inflation which had been unprecedent in the last four decades in those climes,” Mr Emefiele said.
“For Nigeria, members were of the view that Nigeria is confronted with, not only inflation but also fragile output growth.
“As a result, MPC believes that its current stance of price and monetary stability conducive for growth remain desirable.
“The MPC is convinced that various measures being implemented were helping, not only in boosting output growth, but also in moderating inflation.”
The committee then advised the CBN to continue to use its development finance tools to accelerate output growth, which will also help in boosting manufacturing output that would ultimately aid moderation in prices.
It also requested the bank to continue its use of administrative measures, including discretionary tools at its disposal through CRR, to control money supply in the economy.