In a bid to address the persistent rise in inflation and tackle the surge in food prices, the policy-setting committee of the Central Bank of Nigeria (CBN) has announced an increase in the monetary policy rate (MPR) from 18 per cent to 18.5 per cent. This marks the third consecutive time this year that the apex bank has raised the benchmark rate.
The decision was disclosed by Godwin Emefiele, the governor of the CBN, during a press briefing held at the CBN headquarters in Abuja on Wednesday.
Emefiele emphasized the significance of the MPR as the baseline interest rate that serves as the foundation for all other interest rates within the economy.
“The current trend in price development would continue to be monitored by the bank with greater collaboration with fiscal authority to address the drivers of inflation,” stated Emefiele, highlighting the central bank’s commitment to closely monitoring the evolving situation and working in tandem with the fiscal authority to combat inflation.
Nigeria’s inflation rate recently rose to 22.22 per cent, with food prices contributing significantly to the surge.
The apex bank’s decision to raise the MPR reflects its determination to mitigate the adverse effects of inflation and stabilize the economy.
Emefiele acknowledged that while headline inflation remains a substantial challenge, other macroeconomic indicators are moving in the right direction despite existing challenges.
During the committee’s meeting, members voted to increase the rate by 50 basis points, bringing it to 18.5 per cent.
Additionally, they decided to maintain the asymmetric corridor at +100 and -700 basis points around the MPR, as well as retain the cash reserve ratio (CRR) at 32.5 per cent and the liquidity ratio at 30 per cent.
