By David Agba
For the eight consecutive times, the Monetary Policy Committee (MPC) has once again retained the Monetary Policy Rate (MPR) at 14 per cent due to persistent uncertain economic conditions and high inflation.
The Central Bank Governor, Mr Godwin Emefiele, made this known at a news conference on the outcome of the last Monetary Policy Committee meeting for the year 2017 in Abuja yesterday.
He said that nine members were present at the meeting and while eight voted to retain the MPR and other monetary indices, one person voted to reduce the MPR by 100 basis point.
“This means that the Cash Reserve Ratio still remained 22.5 per cent and Liquidity Ratio, 30 per cent.
“Also, the Asymmetric corridor is at 200 and -500 basis points around the MPR.
“The committee took note of the gains made so far as regards its earlier decisions, thus extensively debated whether to hold, to tighten, or to ease the policy stance.
“While tightening will strengthen the impact of monetary policy on inflation with complementary effect on capital flows and exchange rate stability, it nevertheless could also dampen the positive outlook for growth.
“On the other hand, loosening may strengthen the outlook for growth by stimulating domestic aggregate demand through reduced cost of borrowing; it would nonetheless aggravate the upward trend in consumer prices and exchange rate pressures.
“On the argument to hold, the committee believes that key variables have continued to evolve in line with the current stance of macroeconomic stability policy and should be allowed to fully manifest,” he said.
Emefiele said that the committee expressed satisfaction with the slow but gradual growth in the economy.
“The economy has begun to show strong signs of recovery as public investment has picked with increase housing construction at the Federal and state levels as well as rising at the ports to support the purchasing manager index.
“The committee was, however, of the view that policy makers must not relent in their aggressive policy initiatives aimed at continuing the positive growth trajectory.