The Central Bank of Nigeria’s (CBN) policy-setting unit has on Tuesday voted to raise the Monetary Policy Rate (MPR), which measures interest rate, to 13% to tame rising inflation.
The MPR is the baseline interest rate in an economy, every other interest rate used within an economy is built on it and it is decided by the Monetary Policy Committee (MPC).
The Governor of CBN, Godwin Emefiele while speaking after the committee’s meeting said that six out of eleven 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%.
Emefiele said the global outlook remains clouded with uncertainties over the Russia-Ukraine war and the COVID-19 pandemic.
“The sharp rise in inflation across the world as generated growing concerns among central bankers driven by rising demands and wage bills… consequently, US Fed, England and Canada have provided shift away from their policy stance,” he said.
“To reduce inflationary pressure, CBN decided to take a shift on historical stance on monetary policy rate.”
Emefiele urged banks and the federal government to redouble efforts in supporting monetary authority.