The Central Bank of Nigeria (CBN) has raised the Monetary Policy Rate (MPR) from 13 per cent to 14 per cent.
This development was disclosed Tuesday, by CBN Governor Godwin Emefiele while addressing members of the press at the apex bank’s headquarters in Abuja.
Emefiele says the decision became pertinent due to the rising inflation which has over time, affected Nigerians. This is the second raise in interest rate this year.
Emefiele said all members of the 11-member monetary policy committee (MPC) voted for rates to rise at the latest meeting, although they differed over the size of the increase. Six MPC members, a majority, voted for a 100 basis point increase.
“Members were unanimous that given the aggressive increase in inflation, coupled with the resultant negative consequences particularly on (the) purchasing power of the poor… there is a need to continue to tighten (policy)” said Emefiele.
“However the policy dilemma was hinged around the level of tightening needed to rein in inflation without dampening manufacturing output, which could result from the higher cost of borrowing.”
The country’s Naira currency was quoted at a new record low on the black market after the rate decision was announced, traders said.
Inflation in Nigeria is being driven by rising cost of diesel, which is widely used to generate power; rising prices of staples especially grains and bread.
According to him, the decision would help tackle the rate of rising inflation in the country.
Details shortly…