Worried by rising Inflation, the apex bank, Central Bank of Nigeria (CBN), has raised its benchmark interest rate, known as Monetary Policy Rate (MPR), for the fourth time in 2022 by 100 basis points to 16.5 percent.
The announcement was made by the Governor of CBN on Tuesday, after the two-day Monetary Policy Committee (MPC) meeting of the apex bank in Abuja.
Nigeria’s inflation hit a 17-year high of 21.09 percent in October 2022, despite raising the benchmark rate in the last three meetings.
The CBN started to tighten monetary policy from 11.5 percent to 13.6 percent in May, and 14 percent in July. The bank pushed the rates further to 15.5 percent in the last meeting held in September.
Emefiele said the outlook of the global and domestic economy remains cloudy due to the tightening of monetary policies. According to him, growth in the Nigerian economy is expected to slow down more than early projections.
He said global inflationary pressure has continued to hunt the domestic market.
Emefiele said inflation has begun to decelerate month on month due to the hike in the MPR.
He said nine members voted to raise the MPR by 100 basis points, while two members voted to raise the rate by 50 basis points.
“MPC members unanimously voted to retain other parameters. Consequently, the CBN retained the Asymmetric Corridor of +100/-700 basis points around the MPR; retained the CRR at 32.5 per cent; and the Liquidity Ratio at 30 per cent.
“The MPC noted with concern the continued aggressive movement in inflation, even after the three consecutive rate hikes at its previous meetings. He expressed its unrelenting resolve to restore price stability while providing the necessary support to strengthen the fragile recovery”, Emefiele said.