BREAKING : CBN increases interest rate to 18%

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Tuesday voted to raise the interest rate or Monetary Policy Rate (MPR) further by 50basis points to 18 per cent from 17.5 per cent.

At its second meeting of the year, the members voted to retain the asymmetric corridor of +100/-700bps around the MPR; retain the CRR at 32.5per cent; and retain the Liquidity Ratio at 30per cent.

Findings by Westernpost revealed the MPR now at its highest level since November 2002 when it was at  18.5per cent.

Responding, the President of Association of Capital Market Academics, Professor Uche Uwaleke in a chat with WesternPost said: “It’s apparent the MPC is still concerned about rising inflation and the pressure in the forex market against the backdrop of its primary mandate of maintaining price stability.

“However, I had expected MPC to maintain a hold position considering the significant drop in currency in circulation occasioned by the currency redesign policy and the fact inflation rate actually decelerated month on month between January and February 2023.

“The adverse impact of the recent cash scarcity on productive activities as well as the conclusion of election season should have provided justification for a hold position.

“That said, I think that the iincrease in the MPR by 50 basis points is a signal to financial markets that the CBN has begun the process of rate-hike pause and I expect that a complete halt in policy tightening will most likely happen at the next scheduled meeting of MPC in May.

“This is necessary in order to stimulate economic activities and create job opportunities.”