The Central Bank’s Monetary Policy Committee on Tuesday hiked the monetary policy rate (MPR) to 14 per cent, barely two months after it was raised to 13 per cent by the body.
Godwin Emefiele, the CBN governor made the announcement after the 286th meeting of the MPC. He said the adjustment was needed to defray the effects of rising inflation.
Emefiele said the committee members voted to hike the rate by 100 basis points and retained the asymmetric corridor at +100 and -700 basis points around the MPR and liquidity ratio at 30 per cent.
Nigeria’s inflation surged to an 11-month high in May, standing at 17.71 per cent, according to the report from the Nigerian Bureau of Statistics.
MPR is the baseline interest rate in an economy from which every other interest rate used within the economy derives.
The financial regulator had frozen the MPR at 11.5 per cent for two and a half years before the May 24 increment.
During its third quarterly media briefing in 2022 on the state of the Nigerian economy, the Lagos Chamber of Commerce and Industry (LCCI) advised CBN to roll out more friendly supply-side policies to boost productive sectors.
The chamber said the rate hike alone would not curb inflationary pressures.
It emphasised the need for the apex bank to pay attention to boosting supply and cushioning rising production costs caused by the high cost of energy and raw materials.
