The Central Bank of Nigeria (CBN) has raised the Monetary Policy Rate (MPR), which controls interest rates to 13 percent.
The Governor of the CBN, Mr. Godwin Emefiele, who announced the increase on Tuesday in Abuja at the end of the meeting of the bank’s Monetary Policy Committee (MPC), stated that the members of the MPC voted in favour of the increase of the MPR, which had remained unchanged in the last two and a half years.
According to Emefiele, the sharp rise in inflation across both the advanced and emerging market economies has generated growing concerns among central banks as the progressive rise in inflation driven by rising aggregate demands and wage growth has put sustainable pressure on price levels.
“Consequently, the major central banks such as the U.S. Fed, the Bank of England, European Central Bank, and Bank of Canada have provided strong guidance of a progressive shift away from monetary policy accommodation to drive market interest rate, which may ultimately impact capital flows away from emerging market economies,” he said.
He disclosed that the committee also voted to retain the asymmetric corridor at +100 and -700 basis points around the MPR, as well as Cash Reserved Ratio (CRR) at 27 percent, while retaining all other parameters.