The monetary policy rate (MPR), which measures interest rate, has been jacked up from 14 percent to 15.5 percent to tame rising inflation.
Godwin Emefiele, Governor of the Central Bank of Nigeria, CBN, made this known on Tuesday when giving an update on the outcome of the Monetary Policy Committee meeting in Abuja.
In July, the interest rate was raised from 13 per cent to 14 percent.
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.
Emefiele said, “The committee voted unanimously to raise the MPR…The MPC voted to raise the MPR to 15.5, retain the asymmetric corridor at +100 -700 basis points around the MPR. Increase the Cash Reserve Ratio (CRR) to a minimum of 32.5% and retain liquidity ratio at 30%.”
Giving an explainer earlier, the apex bank’s governor said, “Members deliberated the impact of the widening margin between the current policy rate of 14 percent and the inflation rate of 20.52 percent.
“At this meeting, the option of reducing the policy rate was not considered as this would be gravely detrimental to reigning in inflation. The committee thus agreed unanimously to raise the policy rate to narrow the interest rate gap and reign in inflation. The committee thus voted unanimously to raise the MPR.
“10 members voted to raise the MPR by 150 basis points, one (voted to raise it) by 100 basis points and one by 50 basis points. 10 members voted to increase CRR (Cash Reserve Ratio) by 500 basis points, while two members voted to increase it by 750 basis points.”