The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) rose from its two-day meeting yesterday unanimously voted to raised the Monetary Policy Rate (MPR), the benchmark interest rate, by 100 basis points on Tuesday to 16.5 percent to fight inflation.
This is the fourth consecutive rate hike and the highest rate since November 2002 (18.5%), the hike brings the cumulative interest rate increase in 2022 to 500bps.
He said nine members voted to increase the MPR by 100bps, while the remaining two members voted for a 50bps hike in the MPR.
Also, the Committee voted to retain other parameters. The CBN retained the asymmetric corridor of +100/-700 basis points around the MPR, retained the cash reserve ratio at 32.5 per cent, and the liquidity ratio at 30 per cent.
On domestic growth, the MPC noted the consistent positive performance since the exit from the COVID-19-induced recession, driven by the non-oil sector and complemented by continued policy support from the fiscal and monetary authorities.
On inflation, the Committee remained concerned about the continued uptick in inflationary pressures for the ninth consecutive month, with the headline inflation settling at 21.09% y/y in October.
However, the Committee noted the slowdown in the m/m inflation (-11bps to 1.24% m/m as of October), indicating that price pressures are responding to the CBN’s recent interest rate hikes.
