CBN Shuns Adeosun, Retains 14 Percent Monetary Policy Rate

The Monetary Policy Committee of the Central Bank of Nigeria shunned Minister of Finance, Kemi Adeosun’s calls for it to lower interest rates on Tuesday and retained it at the current 14 per cent. Adeosun had said the lowering of the rates would help the government borrow domestically without increasing debt servicing costs.

 CBN Governor, Godwin Emefiele, said the apex bank decided to hold the lending rate in order to maintain its primary objective of price stability. He said the decision was unanimously agreed on by all the 10 members of the committee who attended the meeting. He also said members of the committee also left the Cash Reserve Ratio and the Liquidity Ratio unchanged at 22.5 per cent and 30 per cent, respectively.

Emefiele said the Federal Government should toe the line of other developed countries such as the United States that adjusted its tax policy during the period of economic recession to stimulate consumer demand. For instance, he said the government should consider reducing the tax burden on the low and middle-income earners, while increasing the rates payable by the rich.


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