FRI, JAN 24 2020-theG&BJournal– The Central Bank of Nigeria (CBN) has raised the Cash Reserve Ratio (CRR) by 500 basis points to 27.5% but held rate and other parameters.
The MPR was held at 13.5% while the liquidity ratio was left at 30%
The CBN governor, Godwin Emefiele said today that the decision of the Monetary Policy Committee (MPC) to raise the CRR is driven by the recent inflationary pressure on the economy. He suggested that the boarder closure exacerbated the inflation rate, which he says is inimical to growth.
Reading from a communiqué after the MPC meeting, the apex bank governor said also that the decision to hold all other rates was informed by the conviction of the Committee members that there is a need to observe the response of the economy to several policies introduced by the Central Bank.
Emefiele also noted the high liquidity in the economy induced by the high loan to deposit ratio and restriction on Open Market Operations (OMO) as responsible for the Committee’s decisions.
Today’s MPC is the first meeting of the year and was earlier slated to hold on Monday and Tuesday, January 20 and 21 2020, respectively.
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