TUE, MARCH 26 2019-theG&BJournal-The Central Bank of Nigeria (CBN) today announced what is viewed as a major shift in policy when it officially announced cut in Monetary Policy Rate (MPR) by 50 basis point to 13.50% from 14%, the first rate cut in three years. The MPC retained the Cash Reserve Ratio (CRR) at 22.5% and Liquidity Ratio at 30% after their two-day deliberations in Abuja.
According to Emefiele, the rate cut is meant to signal that there is a need for the country to move course a little further.
‘’It is imperative for monetary policy to provide support for growth and employment,’’ he said.
Six of the 12 member Committee members voted for the 50 basis point cut, according to the governor.
The CBN decision, according to our analysts, suggests that CBN is jettisoning its hawkish posture on inflation. The earlier prediction thanks to the persistent fall in inflation was that the apex bank will maintain the status quo.
The latest inflation figure published by the National Bureau of Statistics (NBS) showed easing of inflationary pressure by 0.06 percent to 11.31. Besides, inflationary build up remains moderate. Election spending was very subdued from our reckoning.
Analysts say the CBN left a lot of watchers dry on this.
“It is not something we anticipated. It a big surprise to us,’’ says one analyst in Lagos today shortly after the pronouncement by the CBN governor, Godwin Emiefele.
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