*Godwin Emefiele, Governor of Central Bank of Nigeria, explains the   Monetary Policy Committee, unanimously, agreed to raise the policy rate to narrow the interest rate gap and reign in inflation in the country’s economy

Isola Moses | ConsumerConnect

In a move to further checkmate the soaring inflationary trend in the economy, the Central Bank of Nigeria has increased the Monetary Policy Rate (MPR) to 15.5 percent from 14 percent.

ConsumerConnect reports the MPR measures interest rate in the country’s economy.

Mr. Godwin Emefiele, Governor of CBN, discloses this development Tuesday, September 27, 2022, after a Monetary Policy Committee meeting in Abuja, FCT.

Emefiele stated: “The committee voted unanimously to raise the MPR.

“The MPC voted to raise the MPR to 15.5, retain the asymmetric corridor at +100 -700 basis points around the MPR.

“Increase the Cash Reserve Ratio (CRR) to a minimum of 32.5% and retain liquidity ratio at 30%.”

The CBN Governor had said the MPC “members deliberated the impact of the widening margin between the current policy rate of 14 percent and the inflation rate of 20.52 percent.

“At this meeting, the option of reducing the policy rate was not considered as this would be gravely detrimental to reigning in inflation.”

He also noted that “the committee thus agreed unanimously to raise the policy rate to narrow the interest rate gap and reign in inflation.

“The committee thus voted unanimously to raise the MPR.”

Emefiele further said: “10 members voted to raise the MPR by 150 basis points, one (voted to raise it) by 100 basis points and one by 50 basis points.

“10 members voted to increase CRR (Cash Reserve Ratio) by 500 basis points, while two members voted to increase it by 750 basis points.”

Bankers’ Bank gives banks 48 hrs on CRR deadline

Meanwhile, the Central Bank of Nigeria has issued

commercial banks in the country a 48-hour ultimatum to meet the Cash Reserve Requirement (CRR) deadline or face exclusion from the Foreign Exchange (Forex) market.

Emefiele also cautioned the Deposit Money Banks (DMBs) in the country l to meet their Cash Reserve Requirement by Thursday, September 29, or risk being shut out from the Forex market by Friday, September 30 this year.