Contrary to widespread speculation by analysts and financial market commentators, the Central Bank of Nigeria’s(CBN) Monetary Policy Committee (MPC) on Thursday voted to retain all the monetary policy rates at their current levels.
The rate retention came amidst strong concerns for inflationary pressure from the anticipated heavy spending for year-end- celebrations, election campaign and the proposed increase in minimum wage.
All the 11 members of the MPC unanimously voted to retain the monetary policy at 14 percent, cash reserve ratio at 22.5 percent, liquidity ratio at 30 percent and a +200/-500 basis points asymmetric corridor around the MPR.
Addressing journalists in Abuja at the end of the MPC’s meeting, Godwin Emefiele, CBN Governor, explained that the committee believed that the marginal drop in October’s inflation figure from 11.28 percent to 11.26 percent was seasonal and sustainable, adding that the upside risk to inflation still remains.
The prospective increase in minimum wage to N30,000/month, inflationary rates, continued portfolio outflows and increasing political uncertainty ahead of the 2019 general elections which were expected to guide the committee’s decision, at this point, seemed not to be significant factors as yet .