The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) resolved by a majority vote to increase the Monetary Policy Rate (MPR) by 50 basis points to 18.0 percent.
As a result, the MPR is now at its highest level since November 2002 (18.5%). The voting pattern of members at the meeting shows that an aggressive rate hike was entirely out of the conversation at this meeting as 10 members voted to raise the MPR by 50 basis points, one member voted to increase the MPR by 25 basis points and the remaining member voted to hold the MPR.
In the same vein, the committee voted to maintain other policy parameters at current levels; the asymmetric corridor around the MPR at +100bps/- 700bps, cash reserve requirement (CRR) at 32.5%, and liquidity ratio at 30.0 percent.
Justifying it decision, the committee, according to the governor of the CBN, Godwin Emefiele, focused its attention not only on the inflationary trends in most major economies, but also on the reported impact of policy rate hikes: aimed at reining in inflation on financial system stability in the global financial system.
