Financial analysts are optimistic that the Monetary Policy Committee of the Central Bank of Nigeria holding benchmark rates will further sustain relative stability in the country’s foreign exchange market and the downtrend of inflation,
Before the last Monetary Policy Committee meeting of the Central Bank of Nigeria, there were mixed expectations. Some analysts advocated for cutting benchmark interest rates to increase liquidity in the real sector, while others believed the rates should be maintained, arguing that inflation remained high at 22.22 per cent as of June, despite being the third consecutive decline. The drop in inflation was largely due to continued forex stability and minimal volatility in energy prices.
Eventually, the committee retained the Monetary Policy Rate at 27.50 per cent, the asymmetric corridor around the MPR at +500/-100 basis points and the Cash Reserve Ratio for Deposit Money Banks at 50.00 per cent and for Merchant Banks at 16.00 per cent, at its meeting held on July 21-22 in Abuja. It also kept the Liquidity Ratio unchanged at 30 per cent.