May 24, (THEWILL) – The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has voted to increase the monetary policy rate (MPR) to 13 percent after two and half years. The MPR was 11.5 percent before the upward adjustment. .
Addressing journalists on Tuesday after the committee’s third meeting for the year at the CBN headquarters in Abuja, CBN Governor, Mr Godwin Emefiele, said the committee took the decision to curtail what he called aggressive rise in inflation rate which he said would affect growth.
He said the committee voted to maintain the CRR at 27 percent and the Liquidity Ratio at 30 percent while the asymmetric corridor of +200 and -700 basis points around the MPR was also adopted.
He expressed concern that the impact of the CBN development finance initiatives was being threatened by an astronomic rise in inflation rate and explained that the MPC was faced with the dilemma of managing two parallel trends at the same time.
He said that rising money demand was on the increase and that the trend is likely to continue till the end of the 2023 elections.
“The dilemma confronting the MPC at this rate was how best to drive down domestic prices amid rising inflation while at the same time continue to support the fragile recovery of the Nigerian economy,” he said.
He said the MPC urged the Bank to sustain its development finance initiatives which provide long-term loans at low and single-digit interests.
He said that the MPC noted that the war between Russia and Ukraine has resulted in significant disruption to the global supply chain which will be contributing to the general inflationary trend across the globe.
…More details later
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
