The Monetary Policy Committee (MPC) on Tuesday retained interest rate at 14 per cent and urged the Federal Government to evolve robust fiscal policies in reviving the economy from recession.
The Central Bank Governor, Mr Godwin Emefiele, announced this in Abuja during a news conference on the outcome of the MPC meeting.
He said the Committee elected to retain the current policy, which is the Monetary Policy Rate at 14 per cent, Cash Reserve Ratio at 22.5 per cent and Liquidity Ratio at 30 per cent.
The Asymmetric Window was also retained at +200 and -500 point around the Monetary Policy Rate.
Emefiele said that the Committee acknowledged the weak macroeconomic performance and the challenges confronting the economy.
He said that the MPC had consistently called attention to the implications of the absence of robust fiscal policies to complement monetary policies in the past.
Emefiele said the Bank had since 2009, expanded its balance sheet to bail out the financial system and support growth initiatives in the economy, even though it was the work of the fiscal policy makers to do so.
He said nevertheless, the apex bank would continue to deploy its development finance interventions to complement the overall effort of fiscal policy towards reinvigorating the economy.
Emefiele said that Members of the Committee emphasised that improved fiscal activities, especially the active implementation of the 2016 budget, payment of salaries by states and Local Governments, would go a long way in contributing to economic recovery.
He said that the Committee urged the fiscal authorities to consider tax incentives as stimulus on both supply and demand sides of economic activities.
Emefiele said that based on available data, the committee agreed that the month-on-month inflation which was currently at a record high of 17.6 per cent would soon begin to come down.
He said harvests had started to kick-in for most agricultural produce and should contribute to dampening consumer prices in the months ahead.
He also said that the current stance of monetary policy was expected to continue to help lock-in expectations of inflation which has started to improve with the gradual return of stability in the foreign exchange market.
In July, the Committee increased the MPR by 200 basis points from 12.00 to 14 per cent, retained the CRR at 22.50 per cent and the Liquidity Ratio at 30 .00 per cent, among others.
The members said the decision was in recognising that the bank lacked the instruments required to directly jumpstart growth.
The Committee was being mindful not to calibrate its instruments in such a manner as to undermine its primary mandate and financial system stability.