The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has voted to retain the monetary policy rate at 11.5 percent.
The Governor of the CBN, Mr. Godwin Emefiele announced at the end of the two-day meeting of the MPC on Tuesday in Abuja that the liquidity ratio of 30 percent and cash reserve ratio (CRR) of 27.5 percent were also retained by the committee.
Mr. Emefiele explained that retaining the MPR was important since it is the baseline interest rate in the economy and every other interest rate used within an economy is built on the MPR.
According to him, increasing the MPR will increase the cost of borrowing and reduce access to credit for businesses and affect the growth trend of the Nigerian economy.
Speaking on rising inflation rate in Nigeria, Emefiele said that the key drivers of inflation in Nigeria included high level of insecurity, high prices food, petroleum products and electricity tariffs.
The committee had in September 2020 reduced the benchmark interest rate from 12.5 percent to 11.5 percent and left the other parameters unchanged.
GIK/APA