The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has raised the monetary policy rate (MPR) otherwise called the interest rate further by 50 basis points to 18.5 percent.
The MPC however retained the asymmetric corridor of +100/-700bps around the MPR; retained the cash reserve ratio (CRR) at 32.5 percent; and retained the Liquidity Ratio at 30 percent.
Briefing newsmen at the end of the two-day 291st meeting of the MPC, CBN governor, Godwin Emefiele, said that ten members of the committee voted to raise MPR by 50 basis points and one voted for 25 basis points. None voted to retain rates, according to him.
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Defending CBN’s aggressive rate hike, Emefiele, said that inflation would have been worse if they did not adopt an aggressive hike approach, insisting that their approach is working.
In fact, he said that the inflation rate would have been above 30 percent and that the growth rate of the economy would have decelerated the most.
Emefiele admitted, however, that elevated interest has constrained credit, but insisted that reining in inflationary pressure is the key issue to deal with at the moment.
More details coming shortly….
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