The Central Bank of Nigeria (CBN) governor, Godwin Emefiele, has announced that the Monetary Policy Committee(MPC) voted to raise its Monetary Policy Rate (MPR) to 14%. The committee voted to raise the MPR by 200 basis point in a move which shocked many analysts who projected that the apex bank would hold MPR at 12%.
According to the governor, 8 out of the 10 members of the committee were in attendance at this month’s MPC meeting, of this number, 5 voted to raise MPR while 3 voted to maintain status quo.
MPC however retained Cash Reserve Ratio (CRR) at 22.5%, while Liquidity Ratio and the asymmetric corridor remain at 30% and +200-500 basis point respectively.
Emefiele said sluggish growth in the global economy, the Brexit vote, as well as weak growth in the United States all contributed to curtail expectation of global financial prosperity.
Faced with an environment of rising inflation, the MPC was faced with the twin goals of either voting to restart growth or fighting inflation, Emefiele said.
According to the CBN governor, the Committee is concerned about the need to urgently diversify the economy into agriculture, manufacturing, and services in order to rise above its current state. “The Committee expresses satisfaction with banks with regards to credit to the private sector, and encourages commercial banks to keep up the tempo, so as to grow the economy,” Emefiele said.