The policy-setting committee of the Central Bank of Nigeria (CBN) has voted to raise the monetary policy rate (MPR), which measures interest rate, to 13 per cent to tame rising inflation.
The monetary policy committee voted to hike the rate by 150 basis points to 13%, Governor Godwin Emefiele said Tuesday in a televised briefing in the capital, Abuja.
“While it may seem contradictory to raise rates in the face of fragile growth, it is a dilemma that most central banks around the world today are grappling with at this time,” Emefiele said.
“On balance, it is quite clear and compelling that attacking inflation is more urgent in the sequence of policy objectives in this regard.”
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 also voted to retain the asymmetric corridor at +100 and -700 basis points around the MPR and liquidity ratio at 30 per cent.
The rate has been at 11.5% since September 2020, in a bid to spur economic growth after the recession witnessed in 2020 due to the covid-19 pandemic.