Governor of the Central Bank, Mr Godwin Emefiele has announced that the apex bank has retained the monetary policy rate at 12.5 per cent.

Speaking at the end of CBN's Monetary Policy Committee meeting on Monday July 20, Emefiele disclosed that other parameters were held constant, leaving the CRR at 27.5% and the liquidity ratio at 30%.

The CBN Governor noted that the move to tighten will contradict the initiative of expansion of affordable credit to the real sector, while increasing MPR at the stage will be counter-intuitive and will result in upward pressure on market rates and cost of production and a further cut will not be realistic. 

Channels Television reported that he said that the earlier loosening to 12.5% in May is yielding positive impact as credit growth increased significantly in the economy and more time needs to be given for the impact to be felt further.

While also pointing out that the nation’s Gross Domestic Product (GDP) grew in the first quarter of 2020, Emefiele added that there was a decline in output growth due to the COVID-19 pandemic.

He said; 

“Available data from the National Bureau of Statistics showed that real Growth Domestic Product (GDP) grew marginally by 1.87 per cent in the first quarter of 2020 compared with the 2.25 per cent and 2.10 per cent in the proceeding and corresponding quarters of 2019. 

“The performance was largely driven by 5.06 per cent growth in the oil sector and 1.55 growths in the non-oil sector. The decline in output growth in the first quarter was largely attributed to the decline in the oil prices and the shock from the COVID-19 pandemic.

“The Committee observed the gradual but persistent decline in the manufacturing and non-Manufacturing Purchasing Indices below the benchmarks. 10 members of the committee were in attendance."