MPC Retains Lending Rate at 11.5%, Goes after Aboki FX

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has agreed to retain the Monetary Policy Ratio (MPR) at 11.5 per cent

The CBN Governor, Mr Godwin Emefiele, disclosed this on Friday at the end of the two-day MPC meeting in Abuja.

Emefiele said that the committee also resolved to hold all other policy parameters constant.

The decisions reached by the MPC include retention of  MPR  at 11.50 per cent, retention of asymmetric corridor  at +100/-700 bps around the MPR, retention of  cash reserve ratio at 27.50 per cent and retention of Liquidity Ratio  at 30 per cent.

Emefiele said that the bank’s continuous intervention in the agricultural sector would  help to increase food production in the country and moderate the food inflation further.

The News Agency of Nigeria (NAN) reports that the MPC is  retaining the MPR at 11.5 per cent and holding all other parameters constant for the seventh consecutive time.

Meanwhile,  an Economist,  Mr Tope Fasua,  said  that retaining the MPR at 11.5 per cent and having all other parameters constant indicated that the apex bank was being cautious.

Fasua said that a change in the rates at this time could pose negative macro and microeconomic implications.

“Regarding the MPR, the CBN is still watching. If they drop the MPR now and the market takes a cue, inflation will rise. If the banks begin to lend money at lower rates, inflation will rise.

“They cannot afford to increase the rates now because that will hurt people who are borrowing from banks for business,” he said. 

The CBN also announced that they have being investigating the popular website “Aboki FX” for about two and half years, and in that time they have found the website manipulates the currency for its benefits.

In his words, Mr Emefiele state that the owner of the Aboki FX website, is an illegal forex dealer and that he would “pay for it. If he doesn’t come out we will find him. We have engaged security authorities to go after him”

Mr Emefiele also warns companies who patronise the Aboki FX of prosecution.

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