The Central Bank of Nigeria (CBN) has announced an increase in the benchmark interest rate (MPR) by 100 basis points to 16.5%, its highest level since 2001.
This was disclosed by the governor of the CBN, Godwin Emefiele, while reading the communique of the first monetary policy committee (MPC) meeting of the year, on Tuesday 22nd November 2022.
Godwin Emefiele said at the gathering, nine members of the team voted to raise the key rate by 100 basis points, while two members voted to increase the rate by 50 basis points.
In reaching a conclusion, the apex bank said it was agreed that it was necessary to push the anchor interest rate to 16.5 per cent to tame the rising inflation, which increased by 21.09 per cent in October 2022, according to data released by the National Bureau of Statistics (NBS).
However, the MPC retained the asymmetric corridor at +100/-700 basis points around the MPR, the cash reserve ratio was left at 32.5 per cent, and the liquidity ratio was retained at 30 per cent.
Mr Emefiele said it was observed that loosening the rates at this moment could be counterproductive as the tightening of the rates was gradually yielding results, as inflationary pressures were gradually easing, especially on a month-on-month basis.
Recall that over the weekend, the International Monetary Fund (IMF) advised the CBN to further increase the interest rate to curb inflation and to “send a tightening signal.”