Nigeria: CBN Retains Interest Rates, Warns Banks Against Money Laundering

Nov 23, 2018 | The Guardian; All Africa

The Central Bank of Nigeria (CBN) has retained its more than two-year Monetary Policy Rate (MPR) to close the 2018 fiscal calendar.

The decision was reached at the end of its Monetary Policy Committee (MPC) meeting yesterday in Abuja. The MPR, which is the interest rate at which the CBN lends money to commercial banks, was retained at 14 per cent alongside other base rates. They include Asymmetry Corridor at +200-500 basis points around MPR, Cash Reserve Ratio (CRR) at 22.5 per cent and Liquidity Ratio at 30 per cent.

Addressing newsmen, CBN Governor Goodwin Emefiele explained that the decision to retain the rates was unanimously taken by all 11 members. Reviewing the economy in the last two months, he regretted that credit to the private sector grossly under-performed below the 2018 benchmark of 12.4 per cent. Emefiele pointed out that the under-performance of the monetary aggregate was of concern to the MPC, which made a stronger case for facilities to small and medium scale enterprises.

The committee further noted that improvement in security, bumper harvest and stable exchange rate were to moderate inflation. "Overall, the outlook for the economy remains positive with a growth projection of 1.75 percent in 2018," it stated.

Nigerians were, however, advised to watch out for increase in inflation rate in the coming months due to election expenditure, end of year spending, high cost of energy, flooding and farmers/herdsmen crisis. The MPC cautioned that the reduction in inflation figures witnessed last month was unsustainable.

It urged fiscal authorities to work towards containing the challenges and sustaining implementation of the 2018 budget and the Economic Recovery and Growth Plan (ERGP) of the Federal Government to ameliorate supply constraints.

Emefiele nonetheless expressed concern over the possible abuse by deposit money banks of the Money Laundry and other miscellaneous Act as the 2019 polls approach by allowing politicians to launder funds through them, warning that the regulatory agencies were alert. On the MTN fund repatriation saga, he stated that all loose ends were being tidied, promising that both parties would make announcement soon.


Source: All Africa