CBN retains 12% lending rate

The Central Bank of Nigeria (CBN) on Tuesday announced that the prevailing 12 per cent lending rate in the country had been retained.

The Acting Governor of the apex bank, Dr Sarah Alade, made this known while briefing newsmen on the outcome of the 94th Monetary Policy Committee meeting in Abuja.

Alade, however, said that the committee had raised the Cash Reserved Requirement (CRR) of the private sector from 12 per cent to 15 per cent.

She said that the decisions of the committee on the lending rate and the CRR were reached through majority votes of members.

According to her, the committee unanimously voted for further tightening of monetary policy, but members were divided on the instruments.

On domestic economic and financial development, Alade noted that robust growth had been recorded, adding that non-oil sector had continued to be the main driver of growth since the last quarter of 2013, 8.76 per cent rise.

She said that inflation had remained “on the target range” noting that the downward trend in inflation commenced in December 2012 and continued up to February 2014.

“The year-on-year headline inflation fell consistently from 9.5 per cent in February 2013 to 7.9 per cent in November 2013 but rose marginally to 8.0 per cent in December 2013 and January 2014.

“In February 2014, however, it moderated to 7.7 per cent,’’ she said

Alade said that the committee expressed satisfaction over the sustenance of single digit of all measures of inflation, adding that members also restated commitment to sustaining the price stability objective.

On external sector development, she said that the exchange rate remained stable at the Retail Dutch Auction System (RDAS) window, increased at the Bureau de Change but depreciated at the inter-bank level.

“ The exchange rate at the RDAS-SPT during the review period opened at N157.61 per dollar (including 1 per cent commission) and closed at N157.26 per dollar, ’’ she said

This, she said represented an appreciation of 35k or 0.22 per cent.

She added that at the interbank foreign exchange market, the rate opened at N158.83 to a dollar and closed at N164.90 to a dollar, averaging N161.89 per dollar.

“At the Bureau De Change (BDC) segment of the foreign exchange market, the selling rate opened at N173.00 per dollar and closed at N172.00 per dollar, representing an appreciation of 0.58 per cent or N1.00k.

“The BDC segment averaged N170.44 per dollar representing an appreciation of 0.06 per cent.

“For foreign reserve, gross official reserves as at March 2014 stood at 37.83 billion dollars compared with 42.85 billion dollars at the end of December, 2013,’’ she said.

She explained that the drop in the reserves level was due largely to the increased funding of the foreign exchange market “in the face of intense pressure on the Naira and the need to maintain stability”.

She added that the committee unanimously agreed that a continuation of a tight monetary policy was needed to consolidate recent gains in the economy. (NAN)