Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, yesterday, said inflation was still above the six to nine per cent target set by the monetary authority, saying cautious effort must be made to continue to tame it.
This came as the Monetary Policy Rate (MPC), yesterday, retained the benchmark lending rate at 11.5 per cent. The asymmetric corridor was also held at +100/-700 bps around the MPR while the cash reserve ratio (CRR) and liquidity ratio were retained at 27.50 per cent and 30 per cent.
The decisions were disclosed by the Central Bank Governor and Chairman of the Committee, Emefiele at the 282nd MPC meeting held in Abuja.
Emefiele said tightening rates could mute the economic recovery, while reducing the benchmark could increase inflationary pressure.
He said the Committee noted the moderation in headline inflation to 16.63 per cent in September and 15.99 per cent in October but warned that inflation remained above the tolerance level of six to nine per cent target.
The MPC advised that both fiscal and monetary authorities should continue with their interventions to stimulate growth.
The Committee, according to the CBN boss, appealed to banks to scale up lending to businesses to support growth.
Emefiele said CBN extended repayment of intervention facilities to reduce the impacts of the cash flow on businesses.
He said: “From around September, October 2020, Nigeria began the process of easing the lockdown and notwithstanding, the fact that we still saw that around February, March of 2021 that the Delta variant raised its head. We still said that these businesses should also have forbearance. At this time, we believe that global economy has opened up, lockdown has been lifted and of course, we know the casualties and the economic damages that were caused as a result of the lockdown.”
However, he explained that with a gradual easing of international movements, Nigerian businesses are also getting to their normal lives while companies are back to business, revenue has been improved and if revenue improves then, businesses that took loans, then you expect naturally that companies that took loans should be able to pay back.
Emefiele also, the apex bank was pleased that investors were showing interest in FBN Holdings PLC’s shares. He added that the apex bank would not override the authority of the Securities and Exchange Commission (SEC) over the issue.
His words: “I think we should take SEC’s position because SEC is the regulator of the capital market. We will take their position and they will give guidance on this subject. Of course, as it affects the running and operation of the bank, we will take pre-eminence measures to make sure that the right things are done. Naturally, returns are sent to CBN about individual shareholders and if our position is not in tandem with the position of SEC, we will talk to SEC about it and we will also advise the public.