For the first time in two years, the Central Bank of Nigeria (CBN) has raised the lending rate for banks to 13 per cent.
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) have decided to raise the monetary policy rate also known as the lending or interest rate for the first time to 13% from 11.5% in a bid to tame inflation.
This follows a long and tough deliberation among the six members of the committee that makes up the CBN’s highest policy-making body of the Bank.
The committee was caught in a dilemma of retaining the rate on the back of the six consecutive GDP growth or raising the interest rate due to rising inflation and energy cost.
After voting, on the monetary policy rate (MPR) all the committee members agreed an increase in interest rate is necessary.
CBN Governor, and Chair of the Committee, Godwin Emefiele, at a press briefing after the MPC meeting disclosed that all six members agreed that the interest rate should be increased.
In conclusion, the MPR was increased to 13 per cent around the asymmetric corridor around the MPR: +100/-700bps. However all other parameters were retained.
The cash reserve and liquidity ratio were also left at 27.5 and 30 per cent respectively.
Speaking on the decision of the committee Emefiele said, “The Committee considered the rising inflation as important and decided to raise the rate for the first time in two and half years.”
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