For the 13th consecutive time, the Central Bank of Nigeria (CBN) has retained the interest rate, otherwise known as Monetary Policy Rate (MPR), at 12 per cent according to a communiqué posted on the bank’s website.
The decision was taken at the bank’s Monetary Policy Committee (MPC) meeting Tuesday in the capital city of Abuja.
In addition, the bank retained the private sector Cash Reserves Requirement (CRR) at 12%, public sector CRR at 50% and Liquidity Ratio at 30%.
PANA quotes CBN Governor Sanusi Lamido Sanusi as explaining that the decisions followed the success of the Monetary Policy in attaining price and exchange rates stability, the potential headwinds in 2014, the ultimate goal of transiting to a truly low inflation environment; and the need to retain portfolio flows in view of the erosion of fiscal reserve buffers.
The Committee reviewed the global and domestic economic environment from January to October 2013 and re-assessed the short- to medium-term risks to inflation, domestic output and financial stability and the outlook for the rest of the year.
It noted the increase in external reserves to US$45.37 billion as at 15 Nov. 2013, representing an increase of US$1.26 billion or 2.85 per cent above the level of US$44.11 billion at end of September 2013.
External reserves increased by US$0.95 billion or 2.14 per cent on a year-on-year basis over the US$44.47 billion at the end of November 2012.
However, the Committee continued to express its disappointment at the low rate of reserve accretion in spite of strong oil prices, which is a result of the absence of fiscal savings.
The non-oil sector remained the major engine of growth, recording 7.95 per cent compared with a decline of 0.53 per cent for the oil sector in the third quarter of 2013.
Agriculture, wholesale and retail trade, as well as services, continued to be the drivers of non-oil sector growth, contributing 2.50, 1.96, and 2.82 per cent, respectively.
“The relatively strong domestic growth forecast in an environment of sluggish global growth and sturdy signs of deflation reflected the continuing favourable conditions for increased agricultural production and incentives for strong macroeconomic management,” the CBN Governor explained.