Nigeria’s central bank Monetary Policy Committee retains benchmark rate at 13.5%

Rising from its Monetary Policy Committee (MPC) session this afternoon, the Central Bank of Nigeria (CBN) announced its retention of the Monetary Policy Rate (MPR) at 13.5%. The MPR, which measures benchmark lending rate, was retained alongside the Cash Reserve Ratio (at 22.5%), liquidity ratio (at 30%), and asymmetric corridor (at +200 and -500 basis points).

According to Godwin Emefiele, the apex bank’s chief, these resolutions were unanimously made by the 11-member committee that presided over the meeting.

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While the Cash Reserve Ratio is a metric for deciding the minimum portion of the total deposits of customers, held by commercial banks as reserves (cash or deposits) with the Central Bank, liquidity ratio is a financial standard for gauging a bank’s ability to pay off its short term debt obligations. The asymmetric corridor aims at increasing the flexibility of monetary policy, by providing the ability to make timely reactions to external finance or risk sentiment shocks by means of effective management of daily open market operations.

Mr Emefiele admitted that the upward movement in inflation was expected, while addressing journalists after the meeting. He went further to say that the committee’s decision was taken as a measure to protect prices.

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