The Central Bank of Nigeria has raised the Monetary Policy Rate (MPR), which measures interest rate to 15.5 percent from 14 percent to check rising inflation in the country.
The Governor of the CBN, Mr. Godwin Emefiele, told journalists after a Monetary Policy Committee (MPC) meeting on Tuesday in Abuja that the members of the MPC “voted unanimously to raise the MPR to 15.5”.
He added that the committee also agreed to retain the asymmetric corridor at +100 -700 basis points around the MPR and increase the Cash Reserve Ratio (CRR) to a minimum of 32.5%, while retaining the liquidity ratio at 30%.”
According to the governor, with the latest inflation (August) rate of 20.52 percent, the committee members unanimously agreed to raise the policy rate to narrow the interest rate gap and rein in inflation.
“The committee thus voted unanimously to raise the MPR,” he said.
Emefiele also explained that the research study at the central bank showed that once inflation trends above 13 per cent, it will retard growth and “We have seen inflation in the last four months move so aggressively in Nigeria”.
“It is difficult for us, for this MPC with all the data available, with all the research that have been conducted; it is difficult for us not to go in a very aggressive way we decided to go today,” he added.
GIK/APA