March 21, (THEWILL) – The Central Bank of Nigeria (CBN) on Monday, retained Monetary Policy Rates (MPR) at 11.5 percent.
The MPR, which has remained unchanged for months, is a powerful tool for regulating interest rates in the economy.
Lowering the rate could have stimulated more borrowing, while raising the rate could have signaled the CBN’s intention to reduce the economy’s money supply.
CBN Governor, Godwin Emefiele during the MPC meeting, also said the apex bank would retaine the asymmetric corridor at +100/–700 basis points around the MPR; Cash Reserve Ratio at 27.5 percent; and Liquidity Ratio at 30.0 percent.
Emefiele said three members voted for a 25 basis points increase, one member voted for a 50 basis points increase, while six members voted for the retention of the rates.
The Apex Bank Governor said increasing borrowing costs would do the Nigerian economy no good, considering that it is yet to fully recover from the impact of Covid-19 pandemic.
The US last week raised its rates to curb the country’s growing inflation, which is above Fed’s two percent.
Nigeria’s inflation is currently at 15.7 percent which is still above the single digit targeted by the CBN.
Emefiele noted that the sanction against Russia would have a significant downside risk to the global economy.
Emefiele also highlighted that the gains of economic growth, which were recorded as a result of lifting restrictions has been eroded by the Russian-Ukraine crisis.
He blamed the high energy prices experienced by the country on the Russian-Ukraine conflict.
Emefiele said the MPC noted that high energy prices have aggravated Nigeria’s inflation.
