Emefiele said the Bank had since 2009 expanded its balance sheet to bail out the financial system and support growth initiatives in the economy, though it was the work of the fiscal policy makers to do so.
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Saunders voted to keep interest rates unchanged at a record-low 0.25 percent last week, in his first Monetary Policy Committee meeting since joining the BoE from US bank Citi, where he worked as its chief United Kingdom economist.
The minutes note how the economy has fared slightly better than anticipated since the European Union referendum.
Bank executives will now be rushing to re price rates just six days after the new law came into place. “Leaving the rate at 14 percent is to keep attracting inflows”.
They calculate mortgage rates could reach 1.1% by the middle of next year, adding: “If your credit rating is fine, you are probably going to get a cheaper mortgage from either a bank with excess deposits (HSBC, Royal Bank of Scotland) or ones desperate to grow their book – that’s sub 100 basis points (1%)”.
In the aspect of providing opportunity to the public sector to borrow at lower rates to boost consumption and investment spending, the committee agreed that while it was expected to stimulate growth through aggressive spending, “doing so without corresponding efforts to boost industrial output by taking actions to deepen foreign exchange supply for raw materials will not help reduce unemployment, nor would it boost industrial capacities”.
The central bank’s foreign exchange reserves rose to US$7.803.6 billion from $7.769.6 billion at the end of July.
“The committee remains concerned about the persistent slowdown in private sector credit growth”, it said in a statement.
The BoG Governor told the media, however, that the 0.2percent marginal rise does not distort the bank’s medium-term inflation outlook.
The MPC, which was meeting for the first time after the enactment of the Banking Act Amendment Bill, 2015, said it had made a decision to lower the CBR from 10.5 to 10 per cent since the demand pressures on inflation are moderate and expected to decline in the short-term.
Emefiele said based on available data, the committee agreed that the month-on-month inflation which was now at a record high of 17.6 per cent would soon begin to come down.
“Banks are likely to cut back on new lending in response to the inability to price for risk”, she said.
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“A cut may be seen as a means of stimulating the economy”, Khan said before the decision by e-mail.
