By John Ikani
The Central Bank of Nigeria (CBN) has announced that its Monetary Policy Committee (MPC) raised the benchmark interest rate by 50 basis points, bringing it up to 18%.
The move was disclosed by CBN Governor, Godwin Emefiele while reading of the communiqué of the second MPC meeting on Tuesday.
According to him, the committee has also set liquidity ratio at 30%.
The main objective of tightening the interest rate, according to Emefiele, is to combat the current inflation, which is estimated to be around twenty-one percent.
The move is expected to curtail the rising inflation in the country.
Emefiele also talked about the redesign of naira and how the apex bank aligns itself with the Supreme Court’s judgement.
As per his statement, the currency in circulation (redesigned naira) amounts to around one trillion naira.
He also mentioned that the bank will be cautious while pumping more currency into the system.
The CBN Governor went on to express his confidence in the performance of the nation’s commercial banks.
He stated that the banks have remained resilient, with their capital requirement at thirteen percent, non-performing loans at four point two percent, and cash reserve of the banks raising to fourteen trillion naira.
The positive performance according to him, is indicative of the banks’ financial strength, which is expected to contribute to the overall growth of the banking system in Nigeria.
