The Central Bank of Nigeria’s Monetary Policy Committee unanimously decided to hold the benchmark interest rate at 11.5 percent while keeping all other monetary parameters unchanged.
The Governor of the Central Bank of Nigeria, Godwin Emefiele, revealed this when reading the statement of the first monetary policy committee meeting of the year on Tuesday, January 25th, 2022.
Highlights of the Committee’s decision
MPR retained at 11.50%
The asymmetric corridor of +100/-700 basis points around the MPR was retained
CRR was retained at 27.5%
While Liquidity Ratio was also kept at 30%
The MPC observed that inflation in most developed and emerging economies remain high driven by the persistent exchange rate fluctuations and supply bottlenecks.
The committee noted that the increase in the country’s inflation rate in December 2021 is attributable to increased demand during the yuletide and hence suggests that the uptick in the numbers could be a temporary development. The members also believe that inflation will moderate further going into the new year driven by the significant interventions in the agricultural sector.
The MPC highlighted that the Nigerian economy is expected to continue with a positive growth following the impressive growth recorded in the third quarter of 2021, reflecting continuous recovery from the recession.
The continuous retainment of the monetary policy rate at 11.5% is in furtherance of the apex bank’s effort to bolster Nigeria’s economic growth through the expansion of credit to the real sector and belief that despite the uptick in inflationary pressure, a hold policy will help to further boost the country’s economy while inflation is expected to moderate in the new year.
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