CBN raises interest rate to 13%

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has voted to raise the Monetary Policy Rate (MPR), which measures interest rate, to 13 per cent.

This was disclosed by the CBN Governor, Godwin Emefiele, while briefing newsmen at the end of MPC’s 285th meeting at the apex bank’s headquarters in Abuja on Tuesday.

It is the first time in two and a half years that the committee would increase the MPR.

The MPR is the baseline interest rate in an economy while every other interest rate used within such an economy is built on it.

Speaking on Tuesday, Emefiele said six out of the 11 members of the committee voted to raise the key rate.

He stated that the committee also voted to retain the asymmetric corridor at +100 and -700 basis points around the MPR, as well as Cash Reserved Ratio (CRR) at 30 per cent.

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The CBN Governor said the MPC also voted to retain all other parameters.

“The sharp rise in inflation across both the advanced and emerging market economies has generated growing concerns among central banks as the progressive rise in inflation driven by rising aggregate demands and wage growth has put sustainable pressure on price levels.

“Consequently, the major central banks such as the U.S. Fed, the Bank of England, European Central Bank, and Bank of Canada have provided strong guidance of a progressive shift away from monetary policy accommodation to drive market interest rate which may ultimately impact capital flows away from emerging market economies,” Emefiele said.

He, therefore, enjoined various banks in the country and the Federal Government to increase efforts in supporting monetary authority.

The Star