By John Ikani
The policy-setting committee of the Central Bank of Nigeria (CBN) has raised the monetary policy rate (MPR), which measures interest rate, from 15.1 percent to 16.5 percent to tame rising inflation.
Governor of the CBN, Godwin Emefiele announced the decision on Tuesday at the end of the MPR’s bi-monthly meeting in Abuja.
Emefiele who chaired the meeting, said MPC took the decision to moderately tighten the rates to help restore investors’ confidence whilst curbing higher rate of inflation.
Out of the 11 members of the committee that attended the meeting, 10 voted to increase the MPR by 100 basis point while one member voted for a reduction.
It is worthwhile to note that the MPR is the baseline interest rate in an economy, every other interest rate used within an economy is built on it.
Recall that last week, Nigeria’s inflation rate rose to 21.09% in October 2022 from 20.77% recorded in the previous month, an indication of a further rise in the cost of goods and services, despite the hawkish move by the CBN in the past six months.
Highlights of the Committee’s decision
• Increase MPR by 100 basis points to 16.5%.
• The asymmetric corridor of +100/-700 basis points around the MPR was retained.
• CRR was retained at 32.5% while the Liquidity Ratio was also kept at 30%.