The Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) has fixed the Monetary Policy Rate (MPR), otherwise known as the interest rate, at 12%, the bank said.
“The Committee unanimously voted to retain the current stance of monetary policy. In addition, one member voted for an asymmetric corridor around the Monetary Policy Rate (MPR),” it said.
“Consequently, the Committee voted to hold the MPR at 12%; keep the Cash Reserve Ratio (CRR) on public sector deposits at 75% and CRR on private sector deposits at 15%; and retain the MPR corridor at /-200 basis points,” the CBN said in a communiqué after a two-day meeting.
The Committee noted that real Gross Domestic Product (GDP) growth remains robust, citing
the recently-rebased GDP figures released by the National Bureau of Statistics (NBS) which indicated that real GDP grew by 7.41% in 2013, compared with the 5.09% and 6.66% recorded in 2011 and 2012, respectively.
“From the rebased GDP, the new major sectors of the economy in 2013 in terms of their share in GDP were: Services (36.08%); Industry (21.73%); Agriculture (21.50%) and Trade (17.06%),” the committee added.
The non-oil sector remained the main source of overall growth performance (7.77%), driven largely by: agriculture (0.43%), industry (1.28%) of which manufacturing was 1.26% and construction (0.62%); trade (1.54%) and Services (3.89%).
It also noted that Inflation has remained within the indicative benchmark target range of 6.0-9.0% during the first four months of 2014.
On a year-on-year basis, however, headline inflation inched up to 7.9% in April from 7.8% in March 2014.
Food inflation, which was 9.3% in January, declined to 9.2% in February and slightly increased to 9.3 and 9.4% in March and April, 2014, respectively.
Core inflation, which declined to 6.6% in January, increased to 7.2% in February and rose further to 7.5% in April 2014.
While the committee noted with satisfaction Nigeria’s overall domestic economic environment which has remained stable with inflation contained within the target range, it said the key challenge for policy was that of sustaining and deepening the outcomes of existing policies.