BREAKING: CBN raises interest rate to 13%

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Tuesday raised interest rate to 13per cent, leaving all other parameters unchanged.

The apex bank’s committee since February 2021 maintained interest rate at 11.5per cent.

This is the first time the apex bank will be taking a hawkish policy stance since its July meeting in 2016.

Other parameters retained were: the asymmetric corridor of +100/-700 basis points around the MPR; the Cash Reserve Requirement  (CRR) at at 27.50per cent; and liquidity ratio at 30per cent.

 According to analysts at Investmentone Research, “While we expected a slight monetary policy tightening given the previously accommodative position of the committee on consolidating economic growth, we highlight that the committee’s position was aggressively hawkish. At the just concluded meeting, 6 members voted for a 150bps hike in rates, 4 voted for a 100bps hike and 1 voted for a raise of 50bps. 

“We opine that the decision of the MPC was necessitated given the surging inflationary pressures witnessed in the past three consecutive months, capital outflows stemming from policy normalisation in global economies and its attendant impact on the exchange rate.

“In addition, this signals the disposition that the CBN has not left out its primary objective of maintaining price stability.”