CBN Raises Interest Rate To 17.5%
By Ngozi Onyeakusi— The Central Bank of Nigeria (CBN) has raised the Monetary Policy Rate (MPR), which measures interest rates from 16.5% to 17.5 percent to tame inflation.
The CBN Governor, Godwin Emefiele announced this after the apex bank’s Monetary Policy Committee (MPC) meeting in Abuja on Tuesday.
The MPC raised the monetary policy rate by 100 basis points to 17.5% and kept the asymmetric corridor at +100/-700 basis points around the MPR.
The MPC retained Cash Reserve Ratio (CRR) by 32.5% while liquidity ratio is kept at 30%.
Emefiele said MPC “members welcome the recent deceleration of the year-on-year headline inflation, noting that the persistence in policy rate hike over the last few meetings of the committee have started to yield the expected decline in inflation.”
The CBN governor said the committee considered a perennial scarcity of Premium Motor Spirit known as petrol, the 2023 general elections, continuous rise in energy prices, exchange rate pressure as well as continuous rise in insecurity.
He said committee members noted that the naira redesign has huge moderating factors to price development on cash.
Announcing the committee’s decision, Emefiele said, “MPC was of the view that although the inflation rate moderated marginally in December, the economy remained confronted with the risk of high inflation with adverse consequences on the general standards of living.
“Committee, therefore, decided to sustain the current stance of policy at this point in time to further rein in inflation aggressively.
MPC voted to raise the MPR to 17.5%, retain the asymmetric at +100/-700 basis points around the corridor.”