The CBN Monetary Policy Committee (MPC) switched its policy stance to ‘easing’ at the last MPC held on March 25-26, 2019. While holding other policy parameters at previous levels, the Monetary Policy Rate (MPR) was cut by 50bps to 13.5%1 following a retaining policy stance of 14% that lasted for more than two years (since July 2016). The justification for the rate cut is linked to the following: the relative moderation in the exchange rate, continued deceleration of inflation rate, and the gradual renaissance of investment flows. Although the economy has welcomed improvements in economic indicators such as the GDP growth rate, the policy decision was primarily anchored on the need to further stimulate the economy. The rate cut could reduce the cost of borrowing while encouraging credit flows to productive sectors of the economy.2 In the coming months, we expect that the 13.5% MPR will be sustained as the transmission lags of the new rate on other economic variables will be expected to fully manifest before further changes are made.
Macroeconomic Report & Economic Updates
Tax Collected: Tax revenue which has relatively maintained an upward trend, fell considerably in 2015 and dipped significantly in early 2016 on the account of economic downturn, as many businesses sev
This paper was produced as part of a larger project which was jointly financed by the UKDepartment for International Development in Nigeria (through its Policy and Knowledge facility)and the Research Committee of the World Bank.