Cbn Concludes Mpc Meeting, Retains Lending Rate At 14 Percent
SAN FRANCISCO, September 20, (THEWILL) – Despite the call by the Minister of Finance, Mrs Kemi Adeosun, and manufacturers for a reduction in the benchmark lending rate, the Monetary Policy Committee, MPC, of the Central Bank of Nigeria, CBN, on Tuesday retained the Monetary Policy Rate, MPR, at the current rate of 14 per cent.
Adeosun had harped on the need for the apex bank to consider cuts in interest rate as a way of making more money available for borrowing in order to stimulate economic activities.
“As you know, the monetary policy committee is meeting today, and my position has been, look this government is spending its way out of trouble, and that spending, much of it is being borrowed. So if you increase the interest rate, you increase our cost of debt service.
“In an ideal world, I need lower interest rates. I think business, when you are in a recession, you cut interest rate to stimulate activity. So we would love to see the MPC consider how they can help us lower interest rates,” she told Channels TV.
On his part, the President of the Manufacturers Association of Nigeria, MAN, Frank Udemba, called on the CBN to reduce the rates to drive growth in the economy.
According to him, “It is what we have been agitating for since and if the interest rate is brought down, it will be the best decision in the current economic dispensation. It's a wonderful development.
“The fact is that government now engages the organised private sector and recognises the fact that the private sector is possibly the engine of growth, the driver of the economy.
“So we are happy about that. And this has given us opportunity to air our views and concerning the policies they have and how to get this country out of the current recession.
“We have a lot of challenges of doing business but basically they have to pump in a lot of money into infrastructure because that is a quick way to reflate the economy.”
But addressing newsmen shortly after the two-day MPC meeting which was held at the CBN headquarters in Abuja on Tuesday, the CBN Governor, Mr. Godwin Emefiele explained that the apex bank decided to uphold the lending rate in order to maintain its primary objective of price stability.
He pointed out that the decision was unanimously endorsed by all the ten members of the committee that attended the meeting.
Aside the interest rate, he disclosed that the members of the committee also left the Cash Reserve Ratio, CRR and the Liquidity Ratio unchanged at 22.5 per cent and 30 per cent respectively.