Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, says there has been relative improvements in some of Nigeria’s key macroeconomic indicators.
Cardoso said this while presenting the communiqué from the 300th meeting of the Monetary Policy Committee (MPC) of the CBN on Tuesday in Abuja.
He said that the improvements were expected to support the overall moderation in prices in the near to medium term.
According to him, these include the progressive narrowing of the gap
between the Nigeria Foreign Exchange Market (NFEM) and Bureau De
Change (BDC) windows, the positive balance of payments position, and easing petrol
price.
He said that the MPC members also noted with satisfaction the progressive moderation
in food inflation.
He said that they commended the Federal Government for implementing
measures to increase food supply as well as stepping up the fight against
insecurity, especially in farming communities.
“The MPC, thus, encouraged
security agencies to sustain the momentum while government provides
necessary inputs to farmers to further boost food production.
“The committee, however, acknowledged underlying inflationary pressures
driven largely by high electricity prices, persistent foreign exchange demand
pressure and other legacy structural factors.
” The MPC noted new policies
introduced by the Federal Government to boost local production, reduce
foreign currency demand pressure, and thus, lessen the pass-through to
domestic prices.
“Given the relative stability observed in the foreign exchange market, members
urged the CBN to sustain the implementation of the ongoing reforms to further
boost market confidence ” he said.
He reiterated the call by members of the MPC on the fiscal authority to
strengthen current efforts at enhancing foreign exchange earnings, especially
from gas, oil and non-oil exports.
“The MPC, however, expressed concerns about the recent decline in crude oil
prices, attributable to increased production by non-OPEC members as well as uncertainties associated with U.S. trade policy.
“This presents new challenges
for fiscal receipts and budget implementation,” he said.
Cardoso said that the MPC also reaffirmed the continued stability of the banking system
following notable improvements in key performance indicators and observed
the appreciable progress in the ongoing recapitalisation exercise.
He said that the CBN would sustain its effective oversight of the banking industry to
ensure compliance with regulatory and macroprudential guidelines.
The News Agency of Nigeria (NAN) reports that all twelve members of the MPC were in attendance at the meeting.
The committee was unanimous in its decision to hold policy and thus decided to retain the Monetary Policy Rate (MPR) at 27.50 per cent, and retain the asymmetric corridor around the MPR at +500/-100 basis
points.
It also retained the Cash Reserve Ratio (CRR) of Deposit Money Banks at 50.00 per
cent and Merchant Banks at 16 per cent, and also retained the Liquidity Ratio at 30.00 per cent.
