CBN to conclude with MTN soon, retain policy rate at 14%

Central Bank of Nigeria said it is on the verge of announcing an agreement on MTN. CBN governor Godwin Emefiele said this while briefing the media of the outcome of this month’s monetary policy decisions. He however did not provide further details. MTN has been embroiled in an $8.1 billion disagreement with the CBN, which alleges that illegally remitted the money. Emefiele said no other company or person is being investigated for similar issues.

Meanwhile the apex bank has kept its main interest rate at 14 per cent, Emefiele said. The rate has been at 14 per cent since July 2016.  He said that all of the 11 members of the monetary policy committee who met voted to hold the rate as they see inflationary pressures persisting even as prices are becoming more stable. Emefiele said “A hold position is an expression of confidence in the policy regime, given the gradual improvement in both output growth and price stability,”. Economic growth dipped to 1.50 percent in the second quarter, continuing a slowing trend that began in the first quarter. President Muhammadu Buhari, who came to power in 2015 partly on promises to revive the economy, is seeking a second term in elections to be held in February 2019.

Key highlights of the MPC decisions are:

*All 11 MPC members present voted to hold. That compares with three of 10 members who voted for a 25 basis-point increase at a previous meeting in September.

*Retain the MPR at 14 per cent; 

*Retain the asymmetric corridor of +200/-500 basis points around the MPR; 

*Retain the CRR at 22.5 per cent; and 

*Retain the Liquidity Ratio at 30 per cent. 

*“A hold position is an expression of confidence in the policy regime given the gradual improvement in both output growth and price stability, on this premise, the downward risk to growth and upside risk to inflation appear contained.”

*Nigeria’s inflation rate declined for the first time in three months in October even as food-price growth accelerated. The consumer-price index rose 11.26 per cent from a year earlier compared with 11.28 percent in September, the Abuja-based National Bureau of Statistics said Wednesday.

*Even while keeping the base rate steady, the CBN has reined in liquidity via short-term bills known as open market operations, or OMOs, to protect the Naira and save reserves, which are down 13 % in the past six months.