The Central Bank of Nigeria (CBN) has implemented another increase in the monetary policy rate (MPR), raising it by 0.50 percent to 18.50 percent.
Governor Godwin Emefiele made this announcement during a press briefing in Abuja on Wednesday. He stated that the decision to raise the benchmark interest rate was made by the committee to address the issue of inflation.
The CBN governor explained that the committee took into consideration various factors, including the persistent scarcity of Premium Motor Spirit (petrol), the upcoming 2023 general elections, the continuous rise in energy prices, exchange rate pressures, and the ongoing security challenges.
He further mentioned that the committee members recognized that the redesign of the naira has significant moderating effects on cash price developments.
“MPC was of the view that although the inflation rate moderated marginally in December, the economy remained confronted with the risk of high inflation with adverse consequences on the general standards of living.
“Committee, therefore, decided to sustain the current stance of policy at this point in time to further rein in inflation aggressively.
“MPC voted to raise the MPR to 17.5%, retain the asymmetric at +100/-700 basis points around the corridor,” Emefiele said.
By increasing the monetary policy rate, the CBN aims to manage inflationary pressures and stabilize the economy. This move demonstrates the bank’s commitment to maintaining price stability and addressing key economic challenges.
The impact of this decision on various sectors of the economy, including borrowing costs and investment decisions, will be closely monitored. The CBN will continue to evaluate economic indicators and adjust its policies as necessary to support sustainable economic growth and stability.
As the CBN continues to navigate through these challenging times, it aims to strike a balance between managing inflationary pressures and promoting economic development in Nigeria.