CBN increases benchmark interest rate to 14%

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Tuesday increased the Monetary Policy Rate (MPR) to 14 per cent from its initial 13 per cent.

The Governor, Godwin Emefiele said the MPC unanimously agreed to hold all other monetary policy parameters constant.

The Asymmetric Corridor was retained at +100 and -700 basis points around the MPR, the Cash Reserved Ratio (CRR) at 27.5 per cent and the Liquidity Ratio at 30 per cent.

Emefiele explained that the parameters were retained to contend the rising trend of inflation in Nigeria.

The MPC considered the continued aggressive movement in inflation even after the rate hike at its last meeting.

Emefiele disclosed that members agreed not to consider both loosening and retaining rates at the existing levels.

The CBN chief said members felt that loosening will trigger the weakening of the exchange rate which could pass through to domestic prices.

“MPC did not also consider holding rates constant because a hold stance will suggest that the bank is not responding sufficiently to both the global and domestic price developments as inflation numbers continue to trend aggressively upward”, he added.

The body expressed an unrelenting resolve to restore prices stability and provide the necessary support to strengthen our fragile economy.