CBN to IMF: We will continue interventions to support economic growth

• ..Votes to hold MPR at 11.5%

The Central Bank of Nigeria has said it will continue its development finance intervention to support the growth of the economy.

The CBN Governor, Godwin Emefiele disclosed this while reading the communiqué of the first Monetary Policy Committee meeting in Abuja yesterday.

Kaduna 2023: Dattijo visits Emir of Zazzau, seeks royal blessings

Lancet report tasks Nigeria on new social contract centred on health

Emefiele was responding to remarks by the IMF in its latest Article IV report on Nigeria where it advised the CBN to scale back its credit intervention programmes as they are likely to cause market distortion in the long run.

The Apex bank governor said: “The truth is that the IMF has been a great supporter as well as adviser to the CBN as well as Nigeria. It is important that we underscore the support that we have always received from the IMF.

“In 2020, as a result of COVID, the IMF opened its vault to all countries from for the Rapid Credit Facility (RCF) facility loan and Nigeria got the highest in Africa of almost $3.4 billion. It aided us in resolving some of our problems, particularly in the period of COVID.

“In 2021, when they saw the third wave, they came up to say, they were increasing the special drawing right and we benefit to the tune of above $3billion.

“But in terms of advice, we reiterate the fact that the CBN remains a development finance-oriented central bank and it is normal for an emerging market, a developing economy to deploy the development finance tools through intervention to support the growth of the economy.

“I think it is just reasonable that the CBN steps in to support the fiscal to fill that space not through grants but through loans to smallholder farmers, SMEIS and to wake up our manufacturing industries who are dead.”

 Emefiele argued that the IMF will agree that the over N300billion disbursed to over one million homes helped to catalyse consumption expenditure that has helped Nigeria to return positive in GDP even though GDP is still fragile.

 “IMF knows that even our intervention to manufacturing is helping and we have facts to show so.”

 Meanwhile, the Monetary Policy Committee has voted to hold all monetary parameters constant, keeping the benchmark interest at 11.5% despite growing inflationary pressure in the country.

The committee in its second meeting of the year voted to retain the Monetary Policy Rate (MPR) at 11.50 per cent with the asymmetric corridor of +100/-700 basis points around the MPR was retained

The Cash Reserve Ration (CRR) was retained at 27.5% while the Liquidity Ratio was also kept at 30%.

The Central Bank while commenting on its outlook for the global economy, the Governor, Godwin Emefiele suggested that inflation is expected to be on the rise, on the back of a continuous rise in energy prices and could only be contained if the Russia-Ukraine war can be addressed as soon as possible.

However, the MPC based on a majority voted to hold the rates constant, as it believes a move to tighten the interest rate at this time could be counter-productive for the nation’s economy following the uncertainty in the global economy as a result of the Russia-Ukraine faceoff.