By Audrey Lotechukwu
TUE, 24 NOV, 2020-theGBJournal-The Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) today unanimously voted to retain the MPR at 11.5 per cent, Retain the asymmetric corridor of +100/-700 basis points around the MPR, Retain the CRR at 22.5 per cent and Retain the Liquidity Ratio at 30 per cent.
The CBN governor, Godwin Emefiele while addressing the media after the MPC meeting said, the Committee focused on priced stability and also on the need to speedily take actions to exit the recession in reaching the decision.
Nigeria returned to recession as indicated in the latest National Bureau of Statistics (NBS) data which shows the economy shrank -3.62% (year-on-year) in real terms in the third quarter of 2020, two consecutive quarters of negative growth in 2020.
Attention was also focused around tail-winds impacting upward pressure to domestic prices and key head winds to output growth and emphasis was on the need to address structural side issues by putting upward pressure on cost of production and unemployment.
‘’Whereas the MPC felt that government spending and the bank’s expansionary stance would be desirable to support recovery and guide the economy out of recession, it felt loosening would trigger excess liquidity and worsen the inflationary pressures,’’ Emefiele said.
The Governor said, the Committee noted that, although the appropriate response to rising inflationary pressures would be to tighten the stance of monetary policy in other to moderate upward pressure on prices, it nevertheless felt that doing this would exert downward pressure on the recovery of output growth.
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