MPC begins retreat ahead of monetary policy decision on Monday

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Ahead of the Monetary Policy Committee (MPC) meeting on Monday and Tuesday, the Central Bank of Nigeria (CBN) and MPC members embarked on a retreat to offer new ideas and tools to help implement monetary policy for optimal macroeconomic outcomes.

The MPC meeting for the month of July is due to be held on Monday and Tuesday in Abuja, where committee members decide on the direction of the cost of borrowing and other macroeconomic indicators.

This comes as monetary policy has been severely challenged, as its policy space has shrunk considerably, in some cases paradoxically and necessitating the need to rethink monetary policy in the context of emerging challenges and economic transformation, according to Godwin Emefiele, Governor of the CBN. .

“After the meeting, we will see a new improved monetary policy and a new improved Central Bank,” said Emefiele, who chairs the MPC.

“While the Nigerian economy has been engulfed by many crises, just like many other countries around the world, we have been able to relatively weather the storm and have performed much better than many of our peers, thanks to our tailored and resourceful approach to adopting well-thought-out, homegrown policy measures to address our macroeconomic challenges,” he said.

He praised the choice of the theme for the retreat “Implementing monetary policy in a digitally evolving developing economy”, saying that the evolution of FinTechs, cryptocurrencies, digital payments, artificial intelligence and machine learning has changed the way the financial and banking industries operate, both globally and nationally.

Also read: Bank loans fall by 46.29% points in one month – MPC members

“Hence the urgent call for the need to rethink the regulation, supervision and implementation of monetary policy in the financial system. Although the innovations carry many risks and uncertainties for the sectors, they also present many benefits for positive economic transformation and in particular financial inclusion which has been the main catalyst for inclusive growth, poverty reduction and job creation,” he said.

According to him, the Central Bank of Nigeria has championed the principle of financial inclusion to achieve the SDGs including the recent launch of eNaira (CBDC) to attract the large unbanked population into the formal sectors and also improve efficiency of monetary policy and the positive impact on the better standard of living of the population.

Speaking further, he said, “Indeed, while Nigeria’s post-COVID growth recovery can be judged moderate and stable, we have seen a major shift in the key sectoral drivers of this stable growth phenomenon. , including the service sector, modernized agriculture and manufacturing, suggesting that technology and innovation play a major role in the growth of production and economic development in Nigeria. Hence the need to explore new ways of adapting monetary policy tools to improve the contribution of technology and innovations to the growth equation.

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