CBN holds interest rate at 11.5% over imported inflation concerns

The Central Bank of Nigeria (CBN) on Monday retained its benchmark interest rate known as the Monetary Policy Rate (MPR) at 11.5 percent after the second meeting of the year with the Monetary Policy Committee (MPC) in Abuja.

The move is to sustain growth recovery, despite the rise in inflation rate, which accelerated to 15.70 percent in February from 15.60 percent in January according to the National Bureau of Statistics (NBS).

Africa’s largest economy, Nigeria, grew by 3.98 percent in the fourth quarter (Q4) 2021 lower than 4.03 percent recorded in the third quarter (Q3) 2021, NBS data show.

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The CBN has kept the MPR at 11.5 percent since September 2020 from 12.5 percent previously. Members of the MPC also voted to retain the asymmetric corridor of +100/-700 basis points around the MPR; the CRR at 27.5 per cent; the Liquidity Ratio at 30 per cent.

The MPC members believe that the existing monetary policy stance has supported the growth recovery and should be allowed to continue for a little longer for consolidation to achieve the MPC mandate of price stability that is conducive for sustainable growth.

The Committee also feels that a hold stance will enable it to carefully appraise the implications of the unfolding global development around policy tapering and normalization by advanced economies