The Monetary Policy Committee of the Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR) at 12.5%. It also held the cash reserve ratio (CRR) at 27.5%, liquidity ratio at 30% and asymmetric corridor around the MPR at +200/-500 basis points.
This decision of the MPC was disclosed by Godwin Emefiele, the CBN Governor, while reading the communique at the end of the MPC meeting on Monday.
Emefiele explained that eight members of the committee voted in favour of holding the MPR, while two members wanted it reduced.
According to the MPC, the decision to hold all rates constant was largely driven by the effect of the outbreak of COVID-19 that has largely disrupted the global economy.
The CBN also said the decision is to check the rising inflationary rate and the need to consolidate on the gains achieved.
He explained further that tightening liquidity now would increase the cost of production which would translate to higher prices of goods and services and harder economic conditions for Nigerians.