CBN Retains Monetary Policy Rate At 11.5% Despite Rising Inflation

Central Bank of Nigeria (CBN) has retained Monetary Policy Rate (MPR) at 11.5 percent despite the rising inflation rate.

Gatekeepers News reports that the CBN governor, Godwin Emefiele made this known while reading the communique of the first monetary policy committee meeting of the year, on Monday 21st March 2022.

He said the committee voted to maintain the key lending rate at 11.5 percent, with the asymmetric corridor of +100 and -700 basis points around the MPR and liquidity ratio at 30 percent. The committee also voted to retain the Cash Reserve Ratio at 27.5%

Meanwhile, the nation’s inflation rate rose to 15.7 percent in February 2022 due to the surge in energy prices, which was worsened by the electricity blackout across the country.

Emefiele, while commenting on its outlook for the global economy, stated that inflation is expected to be on the rise, on the back of a continuous rise in energy prices and could only be contained if the Russia-Ukraine war can be addressed as soon as possible.

However, the MPC based on a majority voted to hold the rates constant, as it believes a move to tighten the interest rate at this time could be counter-productive for the nation’s economy following the uncertainty in the global economy as a result of the Russia-Ukraine faceoff.