The Central Bank Nigeria (CBN), rising from its 276th Monetary Policy Committee (MPC) meeting on Tuesday, retained the benchmark interest rate, at which it lends to commercial, at 11.75 per cent.
This was disclosed by Governor, CBN, Godwin Emefiele while reading the communique at the end of the MPC meeting. Other parameters such as Cash Reserve Ratio (CRR), Liquidity ratio, and asymmetric corridor remain unchanged to support growth as the Nigerian economy seeks the way out of recession.
The committee highlighted that inflation continues to be influenced by structural policies, increase in petrol price and latest #EndSARS protest.
MPR was kept at 11.50 per cent, while the asymmetric corridor of +100/-700 basis points around the MPR and CRR was retained at 27.5 per cent. While Liquid Ratio was also kept at 30 per cent.
In September when it last met, the MPC had undertaken a rate cut of 100 basis points to 11.5 per cent.
Meanwhile, Nigeria’s local currency, the Naira weakened against the United States dollar on Tuesday on the over-the-counter spot market segment of the currency market, called the Investors and Exporters (I&E) forex window, closing at 386.
It translated to a 0.04 per cent or 17 kobo drop from the rate of exchange at the close of trade on Friday, which was 385.83.
The local currency hit an intraday low of 394.83 against the Dollar before paring down losses to close at 386. Conversely, naira reached a high of 383 before falling to record the 386 close.
Trade volume slumped by 31.5 per cent as liquidity worsened on account of limited dollar supply induced by the central bank’s move to ration the United States currency to conserve Nigeria’s foreign exchange reserves.
It however gained strength against the dollar on the parallel market at 483, relative to the 484 close it recorded at the previous session, data from abokiFX showed.
“I think that the CBN, by pushing the official foreign exchange rate from N306 to N379 to dollar, is in line with market demand.
“It has also helped to narrow the official-parallel market rates gap that formed the basis of ridiculous speculations among unpatriotic forex dealers and spectators,” said Aminu Gwadabe, president Association of Bureau De Change Operators of Nigeria.
