The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has announced that the Monetary Policy Committee (MPC) of the bank has raised the Monetary Policy Rate (MPR) from 13 percent to 14 percent.
Emefiele told journalists at the end of the 286th meeting of the MPC on Tuesday in Lagos that “the committee resolved that the most rational policy option would be to further strengthen its tightening stance in order to effectively curtail the unabated rising trend of inflation”.
He explained that the MPC members were conscious of the fact that output growth remained fragile and that if inflation is not checked now, it could erode the monetary gains achieved in improving consumer purchasing power and “thus worsen the poverty level for the vulnerable populace”.
The CBN boss added that apart from increasing the interest rate, the committee retained other parameters with the asymmetric corridor remaining at +100 and -700 basis points around the MPR, while the Cash Reserved Ratio (CRR) at was retained 27 percent.
Speaking on the resolutions of the members of the MPC, Emefiele said: “Consequently, the Committee resolved to increase the MPR by 100 basis points from 13 percent to 14 percent. In summary, MPC voted as follows:
“Increase MPR to 14% from 13, retain the Asymmetric Corridor at +100 and -700 basis points around the MPR, retain the CRR at 27.5 percent and retain liquidity ratio at 30 percent.”
The current upward review of the interest rate by the CBN on Tuesday is second time in two months. In May this year, the MPC increased the interest rate from 11.5 percent to 13 percent
GIK/APA