MPC Decision – November 2021

Dear All,

Ten (10) members of the committee were in attendance.

Decision (unanimous)

• Retain MPR at 11.5%
• Retain the asymmetric corridor of the MPR at +100 / -700 basis point.
• Retain CRR at 27.5%
• Retain liquidity ratio at 30%.

The MPC noted the relatively healthy GDP growth posted in Q3 ’21, as well as improving headline PMI readings in the months
within the third quarter. In addition, the committee noted the moderate but steady decline in prices as inflation declined for the
seventh consecutive month. The in-house CBN forecast point towards a continued downward trend.

The MPC noted that security challenges across the country remained a major source of concern.

The committee reiterated its call to the FGN to prioritise investment in public infrastructures such as improved transportation
networks, power supply, and telecommunications facilities. Funding for such projects has a multiplier effect on other sectors of the
economy and could be sourced through equitable partnerships with foreign investors and Nigerians in the diaspora.

The committee noted the positive performance of the equities market within the review period and commended the sustained
investor confidence in Nigeria’s economy. The MPC also noted that the capital adequacy ratio and liquidity ratio both remained
above the prudential limits in the banking system. In addition, the MPC noted that the NPL ratio reflects progressive improvement
compared to the corresponding period in 2020. However, the MPC urged banks to sustain their tight prudential regime to bring
NPLs below the 5% regulatory benchmark.

The MPC noted that tightening the rates could increase the cost of funds and constrain output growth. On the other hand, loosening
could further widen the real interest rate gap and compound the price distortions in the money market which could exacerbate
inflationary pressures. However, the MPC believes that holding would encourage continued permeation of policy measures in
supporting recorded growth and macroeconomic stability as well as allow the committee to carefully appraise the unfolding global
developments around tapering and normalisation by advanced economies.