The Monetary Policy Committee of the Central Bank Nigeria (CBN) has voted to retain the monetary policy rate (MPR), which measures interest rate, at 11.5 per cent.
The MPR is the baseline interest rate in an economy, every other interest rate used within an economy is built on the MPR.
Godwin Emefiele, governor of the apex bank, while addressing journalists on Tuesday after the committee’s first meeting for the year at the CBN headquarters in Abuja, said the committee members unanimously retained key rates.
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, the Cash reserve ratio at 27.50%; and liquidity ratio at 30 percent.
The MPC observed that inflation in most developed and emerging economies remain high driven by the persistent exchange rate fluctuations and supply bottlenecks.
The committee hinted that the increase in the country’s inflation rate in December 2021 is attributable to increased demand during the yuletide and hence suggests that the uptick in the numbers could be a temporary development. The members also believe that inflation will moderate further going into the new year driven by the significant interventions in the agricultural sector.
The MPC highlighted that the Nigerian economy is expected to continue with a positive growth following the impressive growth recorded in the third quarter of 2021, reflecting continuous recovery from the recession.
The continuous retainment of the monetary policy rate at 11.5% is in furtherance of the apex bank’s effort to bolster Nigeria’s economic growth through the expansion of credit to the real sector and belief that despite the uptick in inflationary pressure, a hold policy will help to further boost the country’s economy while inflation is expected to moderate in the new year.