In the absence of quorum for what would have been the first Monetary Policy Committee (MPC) meeting for 2018, the Central Bank of Nigeria (CBN) has opted to retain the Monetary Policy Rate (MPR) at 14% and all other variables remain constant.
The CBN shall continue to maintain key monetary policy variables as decided by the last MPC Meeting (November 2017) as follows: MPR at 14.0 percent; CRR at 22.5 percent; Liquidity Ratio at 30.0 percent; and the Asymmetric corridor at +200 and -500 basis points around the MPR.
The MPR is the interest rate at which the CBN lends to banks. This in turn determines the interest rate banks charge members of the public. Cash reserve Ratio is an amount of money banks are expected to hold as reserves with the apex bank. Liquidity ratio is the proportion of assets banks are expected to hold as cash or near cash assets.
Why is the CBN doing this ?
According to the CBN Governor Godwin Emefiele, the apex bank had to take this step since it was unable to form a quorum whih is the minimum number of members required to take decisions. This is in tandem with the CBN Act of 2007.
What is the MPC ?
The Monetary Policy Committee (MPC) comprises the governor of the Bank who shall be the chairman; the four deputy governors of the Bank; two members of the board of directors of the Bank; three members appointed by the president; and two members appointed by the governor.
The executive and the legislature have been locked in a battle of wits over the nomination of Economic and Financial Crimes Commission (EFCC) chairman Ibrahim Magu. While the Senate has twice rejected his nomination, the Executive has insisted on his continued stay in office. The upper chamber has since then refused to screen nominees sent in by the President including the CBN and MPC.
President Muhammadu Buhari had in October nominated Aishah Ahmad as Deputy CBN Governor. Adeola Adenikinju, Aliyu Sanusi, Robert Asogwa and Asheikh Maidugu, who are expected to replace four members of the MPC whose tenures expire at the end of this year also had their names forwarded.