In a bid to tame rising inflation, particularly on the eve of a consequential election year, the Central Bank of Nigeria (CBN) on Tuesday raised its benchmark Monetary Policy Rate (MPR), to 13 per cent.
The CBN Governor, Godwin Emefiele, disclosed this at the end of MPC meeting in Abuja, this afternoon.
“A big surprise for markets today from the Central Bank of Nigeria as they raised rates by 150 basis points to 13%. The CBN evidently sees the rising inflation risks outweighing Nigeria’s growth prospects – a tough decision in complex times,” said Charles Mangin – Head of FX Trading, Crown Agents Bank.
The National Bureau of Statistics (NBS) released the Consumer Price Index Report last month with the inflation index hitting a five-month high of 15.92 per cent in March 2022.
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The CBN policy-setting committee voted to raise the rate, the first time in over two years.
The monetary policy rate (MPR) is the baseline interest rate in an economy, every other interest rate used within an economy is built on it.
Addressing journalists after the committee’s meeting at the CBN headquarters in Abuja, Emefiele said six out of 11 committee members voted to raise the key rate.
Emefiele said the committee also voted to retain the asymmetric corridor at +100 and -700 basis points around the MPR and liquidity ratio at 30 per cent.