CBN retains Benchmark rate, Cash Reserve Ratio

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The Central Bank of Nigeria’s Monetary Policy Committee has decided to retain the country’s benchmark interest rate at 14 percent.
The CBN also decided to leave the existing cash reserve ratios for commercial banks at 22.5 percent and the Liquidity Ratio at 30 per cent.
Asymmetry Corridor is maintained at +200 and -500 basis point.
The latest decision comes despite statistics from the country’s bureau of statistics on Monday which showed a contraction of -2.2 % in the third quarter of 2016.
The country is currently in a recession after the report from the last quarter showed a contraction of 2.06 sending Africa’s biggest economy into a recession after a decline in the first quarter.
In the third quarter of 2016, the nation’s Gross Domestic Product (GDP) contracted by -2.24% (year-on-year) in real terms.
This was lower by 0.18% points from growth recorded in the preceding quarter and also lower by 5.08% points from growth recorded in the corresponding quarter of 2015.
The country was Africa’s largest economy and its top oil producer, but its public finances have suffered as the price of crude oil dropped around the world.
In May, the CBN introduced a flexible exchange rate policy to in a bid to stabilize the Naira.
 But the lack of dollar liquidity has curbed interbank activity, leaving the central bank as the main supplier of dollars.

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