MPC Leaves All Monetary Policy Metrics Unchanged

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The Central Bank of Nigeria (CBN) held its bi-monthly Monetary Policy Committee meeting today July 20, 2020. The committee unanimously voted to leave all monetary policy metrics unchanged.

  • Monetary Policy Rate (MPR) at 12.50%;
  • The asymmetric corridor around the MPR at +200/-500bps;
  • Cash Reserves Ratio (CRR) at 27.5%; and
  • Liquidity Ratio (LR) at 30.0%
The committee considered developments in the global and domestic economy since its last meeting including; the mounting pressure of the second wave of the virus in some of the largest economies in the world, the continued commitment of global central banks to a dovish monetary stance and the rebounding prices of crude oil.
In Nigeria, the committee noted in the meeting; rebounding crude oil earnings, fast-paced sustained inflationary pressures and the surge in the volatility of the FX market amid declining external reserves.
From the meeting, we deduced the committee has lost its fate in the effectiveness of rate cut as a means of tackling economic growth-related problems.
Rather, it expressed its confidence in utilizing other expansionary toolkits to limit the impact of COVID-19 on economic activities.