The Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR) at 11.5 per cent, as the country grapples with a high inflation rate and fuel scarcity.
The CBN, after its Monetary Policy Committee (MPC) meeting on Monday in Abuja, declared that pushing borrowing costs to restrictive levels will not favour Nigeria’s economic recovery from the Covid-19 pandemic.
The US Fed last week raised its rates to curb the country’s growing inflation which is above Fed’s two per cent.
Nigeria’s inflation is currently at 15.7 per cent which is still above the single-digit targeted by the CBN.
The Central Bank of Nigeria Governor Godwin Emefiele said the sanction imposed on Russia by NATO and the USA would have a significant downside risk on the global economy.
Emefiele also pointed out that the gains of economic growth that the country recorded as a result of lifting the COVID-19 restrictions have been eroded by the Russian-Ukraine crisis.
The CBN Governor blamed the high energy prices experienced in the country on the Russian-Ukraine conflict, explaining that the MPC noted that high energy prices have aggravated Nigeria’s inflation.
Emefiele also informed that the poor electricity supply in the country by DISCOS has also compounded the country’s inflationary pressure.
According to him, based on these considerations, the MPC retained the Monetary Policy Rate (MPR) at 11.5 per cent; asymmetric corridor at +100/–700 basis points around the MPR; Cash Reserve Ratio at 27.5 per cent; and Liquidity Ratio at 30.0 per cent.
The CBN Governor explained to journalists that three members of the MPC voted for a 25 basis points increase, one member voted for a 50 basis points increase, and six members voted for the retention of the rates.
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