CBN Keeps MPR at 13.5%.
…Wants $1.5bn Milk Import Bill reduced
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has voted to retain all key economic parameters, including the Monetary Policy Rate (MPR) at 13.5 percent, CBN Governor Mr Godwin Emefiele has said.
Consequently, the asymmetric corridor at +200 and -500 basis point around the MPR, the CRR at 22.5% and retention of the liquidity ratio at 30%.
This is just as he said that the current import bill of milk into the country of between $1.2bn to $1.5bn must be discouraged and charged stakeholders to embrace import substitution as a means of getting out of the woods.
Speaking in Abuja on Tuesday after the MPC meeting, the CBN Governor, Mr Godwin Emefiele said a tightening monetary policy situation was not an option, as key macroeconomic indicators are trending in the positive direction.
Emefiele noted that the Committee welcomed the moderation in headline inflation (year-on-year) to 11.22 per cent in June 2019 from 11.40 per cent in May 2019.
This, according to him, was attributed to the decline in the Food and Core components to 13.56 and 8.80 per cent in June 2019 from 13.70 and 9.03 per cent in May 2019, respectively, while noting that the development as being partly due to the CBN’s support to the agricultural sector and the prevailing stability in the Nigerian foreign exchange market.
“Although inflation moderated in June 2019, the continued pressure on prices continues to be associated with structural factors such as the high cost of electricity, transport and production inputs.”, he said.
He said the MPC, however, expects that with the commencement of the harvest season, food prices will taper further downwards.
He advised that the security challenges in some parts of the country should be addressed urgently to increase agricultural produce in order to sustain the downward trend in inflation, adding that the MPC was c fully comitted to ensure the maintenance of price stability.