The Central Bank of Nigeria (CBN) Monetary Policy Committee voted to raise the benchmark interest rate (MPR) by 100 basis points to 16.5%, the highest level since 2001.
This was disclosed by the Governor of CBN, Godwin Emefiele, while reading the communique of the first monetary policy committee (MPC) meeting of the year, on Tuesday 22nd November 2022.
The MPC during the meeting noted that the further tightening stance will help restore investor sentiment while curbing the rising rate of inflation.
Highlights of the Committee’s decision
- Increase MPR by 100 basis points to 16.5%
- The asymmetric corridor of +100/-700 basis points around the MPR was retained
- CRR was retained at 32.5%
- While the Liquidity Ratio was also kept at 30%
Nigeria’s inflation rate rose to 21.09% in October 2022 from 20.77% recorded in the previous month, an indication of a further rise in the cost of goods and services, despite the hawkish move by the CBN in the past six months.
Recall, that the apex bank had increased the MPR from 11.5% earlier this to 15.5% across three consecutive increases. Nairametrics also reported that Nigeria’s money supply rose to its highest level at N50.5 trillion at the end of October 2022, an increase of N1.26 trillion from the previous month.