The Central Bank of Nigeria (CBN) has raised the Monetary Policy Rate (MPR), which measures interest rate, to 15.5 percent from 14 percent.
This is meant to tame rising inflation.
CBN Governor, Godwin Emefiele, made this known after an MPC meeting in Abuja on Tuesday.
Emefiele said, “The committee voted unanimously to raise the MPR…The MPC voted to raise the MPR to 15.5, retain the asymmetric corridor at +100 -700 basis points around the MPR. Increase the Cash Reserve Ratio (CRR) to a minimum of 32.5% and retain liquidity ratio at 30%.”
The CBN chief explained that “Members deliberated the impact of the widening margin between the current policy rate of 14 percent and the inflation rate of 20.52 percent.
“At this meeting, the option of reducing the policy rate was not considered as this would be gravely detrimental to reigning in inflation. The committee thus agreed unanimously to raise the policy rate to narrow the interest rate gap and reign in inflation. The committee thus voted unanimously to raise the MPR.
10 members voted to raise the MPR by 150 basis points, one (voted to raise it) by 100 basis points, and one by 50 basis points. 10 members voted to increase CRR (Cash Reserve Ratio) by 500 basis points, while two members voted to increase it by 750 basis points.”