MPC Pushes Monetary Policy up to 16.5%

MPC MEETING PUSHES MONETARY RATE TO 16.5% File Picture of the Central Bank Governor, Godwin Emefiele, at a Previous MPC Meeting

The Monetary Policy rate has been pushed up by one percent to 16.5%.

The Cash reserve requirement and liquidity ratio were however left unchanged at 32.5% and 30%.

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The Monetary Policy Committee says that this is the best decision to take considering prevailing economic conditions.

The apex bank governor also revealed on the sidelines of the meeting that the newly redesigned naira notes will be unveiled by the president at the Federal Executive Council Meeting on the 23rd.

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The Monetary Policy Committee pushed up key lending rates by one point five percent at its last meeting in September and it has once again increased it by one percent at its just concluded meeting.

The committee feels its decision at the last meeting was beginning to yield the desired results, as inflation was gradually beginning to moderate.

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It feels holding is not right at the moment considering an expected rise in spending during the Christmas season as well as the forthcoming elections.

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A loosening option is not desirable too, as it will undermine gains already seen from previous monetary policy decisions thereby leading to a more aggressive rise in inflation.

It therefore chose to tighten by one percent while leaving other parameters unchanged.

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The apex bank says its redesigned naira notes will be unveiled by the president at the federal executive Council meeting on Wednesday and adds that the deadline to stop the usage of old currencies will not be extended.

The perennial floods seen this year have grossly affected farmlands with many worried it will badly impact the anchor borrowers programme.

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The apex bank however says it will continue to support farmers through its interventions and engage them aggressively in dry season farming to cushion effects of the production shortfall.

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It is also hopeful grains like Rice and maize in the strategic reserves will help moderate food prices.

Domestic output growth remains positive and the committee urged the monetary and fiscal authorities to continue to align efforts for the benefit of economic growth and development.

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