CBN reaffirms resolve to sustain price stability

By Clem Khena-Ogbena

The Central Bank of Nigeria CBN has reaffirmed its resolve to sustain price stability in the economy, defined by the bank’s indicative benchmark range, as it also retained the bench mark interest rate at 12 percent.

The Acting CBN Governor, Dr. Serah Alade, who stated this yesterday while addressing the media, on behalf of the committee shortly after the bank’s Monetary Policy Committee (MPC) meeting in Abuja, added that the committee came up with determined resolve, having observed that headline inflation had remained within single digit in the last 16 month.

The end to monetary policy tightening has been postponed again, as the apex bank’s MPC retained the benchmark interest rate at 12 percent.

Alade said the decision was reached as the committee had noted increase in the level of liquidity in the economy, arising from AMCON bonds operation and reduced Open Market Operation (OMO) of the CBN The development, which was more of express retention of all the fundamentals, saw also the Cash Reserve Requirement (CRR) for public sector deposit stand at 75 percent, while that of the private sector at 50 percent and the basis point at plus 200.

The Committee also pointed out the marginal rise in inflation from 7.8 percent in April to 7.9 percent in March 2014.

At the interbank foreign exchange market, the selling rate opened at N164.65 to US$ and closed at N162.33/ US $, representing an appreciation of q.41 percent or N2.32Kobo in the same period.

At the Bureau De Change segment of the Foreign Exchange market, the Naira which sold at N172.00/US$ on Marh 26, lost at N167.00 /US$ on May 16, showing an appreciation of 2.91 percent.

The recently rebased Gross Domestic Product figure released by the National Bureau of Statistics (NBS) showed that real GDP grew by 7.41 percent in 2013, compared with the 5.09 and 6.66 percent in 2011 and 2012 respectively.

“” From the re based GDP, the new major sectors of the economy in 2013 in terms of thier xhare in GDP were: Services (36.08%) Industry (21.73%), Agriculture (21.50%) and Trade (17.06%)” The committee pointed out that figures for the first quarter of 2014, based on the rebased GDP were yet to be released by NBS.

“The non oil sector remained the main source of overall growth performance (7.77%), driven oargely by : Sgriculture (0.43%), Industry (1.28%), of which manufacturing was 1.26 percent and Construction, 0.62 percent, Trade 1.54 percent and Services e.89 percent “

Assessing the performance of the economy in the past three months, Alade noted the committee was satisfied, adding that the foreign exchange rate had been stable together with the interest rate in tandem with the policy direction.