...By Joseph Benjamin for TDPel Media.
The Central Bank of Nigeria (CBN) has announced an increase in its monetary policy interest rates to 18.5%.
The decision was made during a meeting of the Monetary Policy Committee (MPC) held on May 24.
Benchmark Interest Rate Adjustment:
The MPC voted in favor of raising the benchmark interest rate by 50 basis points, bringing it to 18%.
This decision reflects the committee’s assessment of the current economic conditions and its impact on monetary policy.
Asymmetric Corridor Maintained:
CBN Governor Godwin Emefiele, while reading the communique of the MPC meeting, stated that the committee voted to maintain the asymmetric corridor at +100 and -700 basis points around the Monetary Policy Rate (MPR).
This corridor helps guide the monetary policy framework.
Inflation and Factors Influencing It:
The MPC attributed the rising inflation rate to factors such as high energy costs and challenges within the supply chain, among others.
These factors are seen as beyond the control of the CBN.
Emefiele emphasized the need for close monitoring of price developments and increased collaboration between the central bank and fiscal authorities to address the drivers of inflation.
Analysts in Nigeria had anticipated that the CBN and MPC would opt to raise lending rates at the conclusion of the Monetary Policy Committee meeting.
These predictions were based on the evolving economic landscape and the need for the central bank to respond accordingly.
Previous Rate Hikes:
The CBN had previously increased the Monetary Policy Rate (MPR) from 11.5% in the early part of last year to 18% in March this year.
This move marked six consecutive rate hikes implemented by the apex bank.
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