Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele yesterday said the bank would raise its COVID-19-targeted facility from N150 billion to N300 billion in order to accommodate more Nigerians in a bid to cushion the impact of the pandemic that has pushed the nation’s economy into its second recession in five years.
Emefiele added that the parallel market cannot be used to determine the true value of the country’s currency, as the value of the naira can only be determined by forces of demand and supply, explaining that the parallel market rate is high mainly because of the illicit activities of people using the dollar for bribery.
He told reporters in Abuja after the Monetary Policy Committee (MPC) meeting that the doubling of the CBN’s COVID-19-targeted facility to N300 billion seeks to spur consumer spending and accelerate recovery from the COVID-19- induced recession.
The apex bank, arising from its two-day meeting of the MPC, the last in 2020, resolved to leave all monetary policy parameters unchanged in continued efforts to stimulate economic growth.
The CBN retained the Monetary Policy Rate (MPR) otherwise known as interest rate at 11.5 per cent with the asymmetric corridor of +100/-700 basis points around the MPR. It further retained the Cash Reserve Ratio (CRR) at 27.5 per cent as well as the Liquidity Ratio at 30 per cent.
The MPR is the rate which the apex bank lends to commercial banks and often determines the cost of funds.