Emma Ujah,  Abuja Bureau Chief

The Central Bank of Nigeria (CBN), yesterday, retained the Monetary Policy Rate (MPR) at 27.5 percent, citing uncertainties fueld by ongoing global   trade war.

The Governor of the bank, Mr. Olayemi Cardoso, disclosed this at the end of the 300th  Monetary Policy Committee (MPC) meeting at the bank’s headquarters, in Abuja.

He said, “The Committee was unanimous in its decision to hold policy, and thus decided as follows:   Retain the NPR at 27.50%; Retain the asymmetric corridor around the NPR at plus 500 to minus 100 basis points; Retain the Cash Reserve Ratio of deposit money banks at 50% and that of merchant banks at 16%; and Retain the liquidity ratio at 30%.”

Why CBN retained Rate

  Cardoso disclosed that the MPC noted improvements in some key indicators, especially the narrowed gap between the two foreign exchange windows, the positive net position of the foreign reserves as well as the easing fuel prices played roles in the decision to hold the MPR.

  He said, “The MPC noted the relative improvements in some key macroeconomic indicators, which are expected to support the overall moderation in prices in the near to medium term.

  “These include the progressive narrowing of the gap between the Nigeria Foreign Exchange Market and Bureau de Change BDC windows, the positive balance of payments position, and easing price of PMS.

  “On the strength of these considerations, and driven by the continued uncertain policy environment exacerbated by ongoing global shocks, members weighed the available policy more comfortable.”

  The CBN boss noted the progressive moderation in food inflation through government measures to increase food supply, as well as, stepping up the fight against insecurity, especially in farming communities and urged security agencies to sustain the momentum while government provides necessary inputs to farmers to further boost food production.

  He, however, acknowledged underlying inflationary pressures driven largely by high electricity prices, persistent foreign exchange demand pressure, and what he described as “other legacy structural factors.”

Call for FX earnings

  “The committee also called on the fiscal authority to strengthen current efforts at enhancing foreign exchange earnings, especially from gas, oil, and non-oil exports,” Mr.  Cardoso added.

  This, he said could be achieved by encouraging Dangote Refinery and similar refineries in the country to increase their outputs, with aim   to supply   petroleum products to the countries in the Sub-Region.

  Concerns over declining oil prices

  The CBN Governor described the downward trend in   prices of crude oil in the international market as a source of worry, adding that at its persistence could negatively impact the implementation of the federal government 2025 Budget.

  According to him, “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, which present new challenges for fiscal receipts and budget implementation.”