For the first time in more than two years, the Central Bank of Nigeria (CBN) raised the monetary policy rate (MPR) to 13%.
CBN Governor Godwin Emefiele said this while reading the 285th statement issued after the apex bank’s Monetary Policy Committee (MPC) meeting on Tuesday.
Mr. Emefiele indicates that the commission has also decided to retain all the other parameters.
Thus, the asymmetric corridor was retained at +100/-700 basis points around the MPR, the Cash Reserve Ratio (CRR) remained at 27.50% and the Liquidity Ratio was maintained at 30.00%.
MPC had held the old MPR of 11.5% for more than two years.
Emefiele said the committee was faced with various options but guided by the need to slow inflationary pressure while engendering economic growth.
“Six members voted to increase the MPR by 150 bps, four members by 100 bps and one member by 50 bps.
“Members expressed deep concern that the upward trend in inflationary pressures will continue despite the gradual improvement in output growth.
“The Committee notes that the current rise in inflation is counter to the growth and full recovery of the Nigerian economy,” he said.
He said several options were considered before the decision to increase the MPR.
“It is clear and convincing that the fight against inflation is more urgent in the order of political objectives.
“MPC urged the CBN to redouble its efforts to support priority sectors of the economy that drive growth.
“He urged the federal government to do more to provide a safe and secure environment for economic activities to spur growth,” he said.