Despite rising inflation, CBN votes to hold MPR at 11.5%

…CRR was retained at 27.5%

The Monetary Policy Committee of the Central Bank of Nigeria has voted to hold all monetary parameters constant, keeping the benchmark interest at 11.5% despite growing inflationary pressure in the country.

This was disclosed by the Governor of the CBN, Godwin Emefiele, while reading the communique of the first monetary policy committee meeting of the year, on Monday 21st March 2022.

The committee decided that MPR should be retained at 11.50%, the asymmetric corridor of +100/-700 basis points around the MPR was retained and

CRR was retained at 27.5% while Liquidity Ratio was also kept at 30%

Nigeria’s inflation rate rose to 15.7% in February 2022, largely attributed to the uptick in core inflation from 13.87% recorded in January 2022 to 14.01% in the review month.

The rise of the core inflation was due to the surge in energy prices, which was exacerbated by the electricity blackout across the country.

The Central Bank while commenting on its outlook for global economy, the Governor, Godwin Emefiele suggested that inflation is expected to be on the rise, on the back of a continuous rise in energy prices and could only be contained if the Russia-Ukraine war can be addressed as soon as possible.

However, the MPC based on a majority, voted to hold the rates constant, as it believes a move to tighten interest rate at this time could be counter-productive for the nation’s economy following the uncertainty in the global economy as a result of the Russia-Ukraine faceoff.