WED, MAY 22 2019-theG&BJournal-The Monetary Policy Committee (MPC) yesterday voted to hold all parameters of monetary policy constant.
9 out of the 11 members of the committee voted in favour after they considered the options of whether to be more accommodative, tighten or hold it position.
By the end of deliberation the MPC voted to Retain the MPR at 13.50per cent; II. Retain the asymmetric corridor of +200/-500 basis points around the MPR; III. Retain the CRR at 22.5 per cent; and IV. Retain the Liquidity Ratio at 30 per cent.
The MPC opted out of tightening despite the recent uptick in inflation to buoy and encourage the focus of DMBs to new credit in support of consumer, mortgage and other priority sectors of the economy, including, SMEs, agriculture and manufacturing. It also based its decision on the what it called the fragile state of the economy.
‘’Increasing the cost of credit would further diminish investment flow and impact negatively on output growth,’’ the MPC said.
Those who favoured a hold position, believed that maintaining monetary policy rate at its present level was essential for better understanding of the momentum of growth before determining any possible modifications.
They also felt that retaining the current policy stance provides an avenue for evaluating the impact of the Bank’s intervention policies to support lending to the priority sectors of the economy.
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