CBN devalues Naira, raises lending rate to 13%

By Etuka Sunday

The Central Bank of Nigeria (CBN) yesterday devalued Naira from N155 to a dollar to N168.

Rising from its Monetary Policy Committee Meeting, the Central Bank of Nigeria (CBN)’s Governor, Godwin Emefiele announced that out of the eleven members of the Committee, nine members voted to increase the MPR to 13 per cent while two members voted to retain the MPR at 12 per cent.

He gave other decisions of the Committee to include: “Increase the CRR on private sector deposits by 500 basis points from 15 per cent to 20 per cent with immediate effect.

“Move the midpoint of the official window of the foreign exchange market from N155/US$ to N168/US$; Widen the band around the midpoint by 200 basis points from +/-3 per cent to +/-5 per cent.

“Retain public sector CRR at its current level of 75 per cent;

Maintain a symmetric corridor of +/- 200 basis points around the MPR; Retain Public sector CRR at 75 per cent; Retain the foreign exchange trading position at 1 per cent.

On inflation, he said the Committee noted with satisfaction that all the measures of inflation were within single digit.

“The Committee, however, recognized the upside risks to inflation in the near-term to include increased spending in the build up to the 2015 general elections, depreciated exchange rate arising from the

falling oil prices accompanied by external reserves depletion, and food supply shocks arising from the increased insurgency activities in the major agricultural belts of the country.

“The Committee was satisfied, as indicated by Staff forecasts that headline inflation would remain well anchored at single digit within the band at year-end if the necessary macroeconomic policy actions were taken.”

On employment, he said, the Committee noted with satisfaction that the reforms in the power sector and other complementary policies if followed through; would promote investment and create the needed jobs for inclusive growth.