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As inflation fighting gets dirty, the Central Bank of Nigeria’s (CBN) monetary policy committee has adopted a consensus to raise its benchmark interest rate by another 100 basis points after two days meeting that ended today.
The monetary policy rate (MPR) has been increased to 16.5% from 15.5% in line with Broadstreet analysts’ consensus and the International Monetary Fund, IMF, expectation in a fight to curb the worsening consumer price index.
At its last meeting for 2022, the Committee reviewed the developments in the global economy and domestic environment, particularly the war in Ukraine, the ongoing normalization of monetary policy in advanced economies.
The pressures side include a zero-COVID policy in China, rising energy prices across markets, supply chain bottleneck, global food crisis, and central bankers’ hawkish rendition toward inflation and the sharp increase in interest rates across the world.
It also reviewed the global and domestic financial environment as well as the outlook and possible risks for the rest of the year. Eleven members of the committee were in attendance and they decided to raise the monetary policy rate for the fourth consecutive time in 2022 to 16.5%.
The committee retains an asymmetric corridor at +100/-700 basis points around the MPR. Also, it maintains status quo on Cash Reserve Ratio (CRR) at 32.5% and the Liquidity Ratio at 30.0%.
MarketForces Africa reported that the CBN raised the MPR by a total of 500 basis points in 2022. At its meeting in May 2022, the CBN increased its benchmark interest rate by 150 basis points, to 13.00%, for the first time in six years.
Also, the CBN committee then increased by another 100 basis points in July to bring it to 14.00%, and by another 100 basis points in August 2022 to send it to 15.50%
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