The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Tuesday, voted to increase the benchmark interest rate (monetary policy rate) to 15.5 per cent from 14 per cent.
This is the third time the apex bank would increase the interest rate this year, as a measure to stem rising inflation.
In August, the country’s inflation rose to an unprecedented 20.52 per cent.
Governor of the apex bank, Godwin Emefiele, who read the communiqué at the end of the two-day meeting in Abuja, said the MPR was raised by 150 basis points from 14 per cent to 15.5 per cent.
He said he committee also raised the cash reserve ratio (CRR) to 32.5 per cent from 27.5 per cent. CRR is the share of a bank’s total customer deposit that must be kept with the central bank in the form of liquid cash, while the asymmetric corridor of +100/-700 basis points around the MPR was retained and liquidity Ratio was also held at 30 per cent.
Meanwhile, in furtherance of efforts to check inflation, which hit 20.52 per cent in August, Emefiele disclosed that the CBN will implement aggressive cash reserve requirement “CRR” measures by mopping up liquidity from commercial banks by Thursday.
He warned banks to fund their accounts immediately and added that banks that fail to fund their bank accounts will be denied access to the foreign exchange market
