Central Bank of Nigeria (CBN) on Tuesday at the end of its Monetary Policy Committee (MPC) meeting raised the benchmark interest rates: Monetary Policy Rate (MPR) from 11 to 12 percent, Cash Reserve Ratio (CRR) for commercial banks to 22.5 percent from 20 percent and maintained liquidity ratio at 30 percent.
Several analysts had expected the central bank to retain interest rate at 11 percent.
However, CBN Governor, Godwin Emefiele who doubles as chairman of the MPC told reporters on Tuesday after the committee meeting that the apex bank would keep the Naira foreign exchange rate stable despite a sharp fall of the currency in the parallel market due to shortages of dollars.
Emefiele said that, Nigeria was going through its worst economic crisis in recent times due to the sharp drop in crude prices.
He said “The MPC voted to raise MPR by 100 basis points from 11 percent to 12 percent, and raise the CRR by 250 basis points from 20 percent to 22.5 percent, retain liquidity ratio at 30 percent.”
He cited the state of the economy and rising inflation, which is above the central bank’s target band of six to nine percent.
The governor also urged the swift passing of the 2016 budget, which was tabled by the Senate on Monday.
The apex bank governor also debunked allegation that it planned to convert the $20 billion reported to have been lying fallow in banks saying, “the 20 billion dollars is a liability, they are not idle. There is no intention and not within our view to begin to convert people’s domiciliary accounts to Naira.”