The Monetary Policy Committee of the Central Bank of Nigeria has increased its monetary policy rate by 50 basis points to 18%.
CBN governor, Godwin Emefiele, revealed this during a news conference on Tuesday in Abuja.
Emefiele stated that the rate tightening is anticipated to slow the current 21 percent inflation rate. From 21.82% in January 2023 to a nearly 17-1/2-year high of 21.91% in February 2023, the annual inflation rate in Nigeria increased for the second consecutive month, exceeding market estimates of 21.85%.
The policy rate had been held at 11.5 percent since September 2020 until the monetary authority was compelled to act in May due to skyrocketing inflation. Since then, the rate has gone up five times in a row despite the fact that, the CBN Governor and Chairman of the MPC, has emphasized that the aggressive hike won’t stop until inflation starts to decline.
Emefiele expressed confidence in commercial banks and noted that they have remained resilient, with the capital requirement remaining at thirteen percent, nonperforming loans remaining at four point two percent, and the banks’ cash reserves increasing to fourteen trillion naira.
The governor of the CBN stated that the bank will continue to inject more currency into the system, but with caution.
Glamour Adah
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