The Monetary Policy Committee of the Central Bank of Nigeria (CBN) on Tuesday voted unanimously to raise the Monetary Policy Rate (MPR), the benchmark interest rate to 13% for the first time in nearly two and a half years.
The MPR, which is the benchmark lending rate, had been left unchanged at 11.5% since September 2020.
The Governor of the apex bank, Godwin Emefiele, who gave this hint while briefing the media on the decisions taken at the end of the Committee’s third meeting this year, said the decisions were based on trends in the global and domestic economic space.
He explained: “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”, the CBN governor added.
According to him, 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 27 per cent.
Emefiele also confirmed that the committee voted to retain all other parameters.
He advised the deposit money banks, other financial institutions and the Federal Government to continue to support the apex bank’s efforts targeted at achieving financial system stability and the nation’s sustainable growth.
