The Central Bank of Nigeria (CBN) has announced an increase in the benchmark interest rate by 50 basis points to 18.5%, according to CBN Governor, Godwin Emefiele, during the reading of the communiqué of the second Monetary Policy Committee (MPC) meeting on Tuesday.
This tightening of the rate is aimed at curbing the current inflation rate of 21%. Emefiele also announced that the liquidity ratio has been pegged at 30%.
Speaking on the naira redesign, Emefiele noted that the apex bank aligns itself with the Supreme Court’s judgment as the currency in circulation (redesigned naira) is about one trillion naira.
He further stated that the bank will continue to pump more currency into the system, but with caution.
Despite the challenging economic climate, the central bank governor expressed confidence in Nigeria’s commercial banks, stating that they have remained resilient, with capital requirements at 13%, non-performing loans at 4.2%, and the cash reserve of the banks rising to fourteen trillion naira.
