Updated: CBN opposes second lockdown, retains interest rate at 11.5%

• Banks’ credit to economy hit N25tn in 2020

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria has asked the Federal Government to do everything possible to avert another round of lockdown.

CBN Governor Godwin Emefiele made this known in Abuja at the end of the first MPC meeting in 2021.

The Presidential Task Force on COVID-19 has warned that the government could be forced to impose a second lockdown on the nation in view of the spike in the new wave of the coronavirus infection and the nonchalant attitude of the people towards recommended safety protocols.

Emefiele said the bank would work with the fiscal authorities to revamp the economy by collaborating on policy implementation.

He also said the CBN had secured approval from President Muhammadu Buhari to restructure the Nigeria Commodity Exchange.

He said the Bank CBN could no longer sit back and watch unscrupulous commodity merchants hoard commodities and force the prices of commodities to be high.

According to him, the CBN owns 60 per cent of the Nigeria Commodity Exchange and it will take over the running of the exchange to international standard

Emefiele also announced that the committee unanimously agreed to retain the current monetary policy stance by leaving the Monetary Policy Rate (MPR) at 11.5 per cent and retain the Cash Reserves Ratio at 27.5 per cent.

It also retained the Liquidity Ratio at 30 per cent; and the asymmetric corridor at +100 and -700 basis points around the MPR.

meanwhile, bBanks’ total credit to the economy rose to N25.02tn as of the end of 2020, this was also disclosed during the Monetary Policy Committee meeting in Abuja on Tuesday.

Emefiele, said, “Aggregate domestic credit, also moved further up by 13.40 per cent in December 2020, compared with 9.48 per cent in the previous month.

“This was largely attributed to the bank’s policy on Loan-to-Deposit Ratio, complemented by its interventions in various sectors of the economy.

“Consequently, banking sector gross credit as at end-December 2020 stood at N25.02tn compared with N24.25tn at the end of November 2020, representing an increase of N774.28bn.”

The committee urged the bank to sustain its current drive to improve access to credit to the private sector while exploring other complementary initiatives, in collaboration with the Federal Government, to improve funding to critical sectors of the economy.