The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), on Tuesday, retained benchmark interest rate at 14 per cent.
At its second meeting this year, which started on Monday, the committee also declared current economic growth as fragile and urged fiscal authorities to continue to provide stimulations for it while devising new policy reforms.
Presenting the communique shortly after the meeting, Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, who doubles as Chairman of MPC, said members expressed satisfaction at the growth trajectory especially because it was driven by both manufacturing and non-manufacturing sectors.
It also urged the CBN to continue to sustain the growth recorded in the foreign exchange reserve position, which stood at close to $48 billion.
The MPC also urged the Federal government to build buffers against oil price shocks and refrain from sharing every available revenue at monthly Federation account allocation committee meetings.
It urged the government to continue to prioritise payment of debts owed contractors, cautioning, however, against injecting funds into the economy in order not to escalate inflation, which has been on a downward trend.
On the $2.5 billion currency swap deal with China, Emefiele assured that the agreement will be to the beneficial to Nigerians, as it will eliminate the interference of a third party currency in transactions between the two countries.
He said with China being Nigeria’s largest trading partner, accounting for 35 percent of its foreign trade, the currency swap will have the salutary effect on businesses and consumers.
The CBN governor said in addition to retaining Monetary Policy Rate (MPR) at 14 percent, the MPC also retained other rates such as Cash Reserve Ratio (CRR) at 22.5 percent; Liquidity Ratio at 30 percent and Asymmetry Corridor at +200-500 basis points around MPR.