CBN ignores MAN, others, retains interest rate at 14%

By Odunewu Segun

Despite repeated calls by the Manufacturer Association of Nigeria, MAN, and other stakeholders in key sector of the economy to the Central Bank of Nigeria to lower interest rate from 14 per cent, the apex bank has retained the rates.

Addressing journalists in Abuja on Tuesday after the end of the 2-day meeting, Godwin Emefiele, governor of the apex bank said all members of the committee voted to hold interest rate at current figures.

He said the committee decided to keep key interest rate at 14 percent, while cash reserve ratio (CRR) and liquidity ratio were held at 22.5 percent and 30 percent respectively.
“The MPC was of the view that whereas the downward trend in inflation is a welcome development, the rate was still significantly above the policy reference band,” Emefiele said.
“Committee is particularly with the gradual retreat in inflation, the relative stability in the naira exchange rate across all segments of the market and the improved prospect of foreign inflows.
According to the CBN boss, the committee was also concerned that loosening will exacerbate inflationary pressure and worsen the gains so far achieved in exchange rate of the naira. It was also convinced that loosening will further increase the negative interest rate.
The Manufacturers Association of Nigeria (MAN) had on Monday called on the Central Bank of Nigeria (CBN) to drop the lending rate from 14 per cent to accelerate productivity and economic growth.
The President of MAN, Mr. Frank Jacobs, who made the appeal, noted that with the appreciation of the naira and further drop in inflation rate, friendlier policies that would stimulate economic growth and boost production should be embraced.
He had also the CBN to create five per cent concessionary interest rate for manufacturers to drive the nation’s diversification agenda and increase contribution to the Gross Domestic Product.
It will be recalled that the CBN had maintained a 14 per cent lending rate to commercial banks since July 26, 2016 in its bid to check inflation and stimulate economic growth.