….Optimistic Of Convergence Of Rates
Yemisi Izuora
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has retained the policy rates, just ast it expressed optimism that the rate between the official and parallel market would converge further.
The committee agreed to retain the rates after assessing the global and domestic economic and financial environment for the first quarter of 2017 as well as the outlook for the medium-term.
Nine out of the ten members at the meeting voted to retain all policy parameters at previous levels while one member voted to raise the MPR.
The committee in line with the current happenings and realities facing the economy decided to
retain MPR at 14 percent, CRR at 22.50 per cent with the Liquidity ratio remaining at 30.00 per cent. It also retained the Asymmetric window at +200 basis point and -500 basis points, around the MPR.
The CBN Governor, Godwin Emefiele, at the end of the MPC meeting expressed the banks determination to see the convergence of rates at the foreign exchange market.
The governor denied that the bank was directed by the National Economic Council (NEC) to intervene in the FOREX market before it started injecting money into the interbank market.
“NEC did not direct the CBN as is being insinuated in some quarters.
“We have seen the trend and we took decision to revise it through our FOREX intervention,’’ Mr. Emefiele said.
When asked if the CBN could sustain the policy, Mr. Emefiele said the bank had the capacity to take decisions and implement them.
He noted that the nations’ foreign reserves had improved further to $31 billion.
Since February when the CBN started its intervention at the interbank market, it had injected more than 1.5 billion dollars, and the Naira had extended its gains against the dollar.
To further sustain its intervention at the market, the apex bank injected another 180 million dollars on Monday to meet the needs of schools, medicals, business and personal travel allowances.