Regulatory Alerts2012-11-26 | MPC/86/19-20/11/2012Central Bank of Nigeria Communique No. 86 of the Monetary Policy Committee Meeting with Personal Statements of Monday and Tuesday November 19 and 20,2012
The Central Bank of Nigeria's Monetary Policy Committee (MPC) held a meeting in October 2012 to discuss the current state of the Nigerian economy and decide on the appropriate stance for monetary policy. The main points discussed include: - The economy is growing steadily, but at a slower pace than in 2011. This slowdown can be attributed to global economic uncertainty, particularly in Europe, as well as domestic challenges such as security issues and floods affecting food production. - Inflation, although still high, has been decelerating, with core inflation (excluding food and energy prices) showing the most significant decline. This improvement can be attributed to the Central Bank's tight monetary policy stance, which includes increasing interest rates. - Global economic conditions remain uncertain, with the U.S. facing the "fiscal cliff" and the Eurozone struggling to resolve its debt crisis. These uncertainties could have a significant impact on commodity prices and capital flows, putting pressure on Nigeria's economy. - The MPC decided to maintain the current stance of monetary policy, keeping the Monetary Policy Rate (MPR) at 12.0% and the Cash Reserve Requirement (CRR) at 12.0%. This decision was made with a view to consolidating on the gains made so far in controlling inflation while remaining vigilant about global economic developments and the potential impact on Nigeria's economy. In summary, the MPC chose to maintain the status quo due to ongoing global economic uncertainties and the need to preserve the recent progress made in reducing inflation. The decision also highlighted the importance of addressing structural issues such as power sector reform and corruption reduction in order to stimulate long-term economic growth.