The monetary policy committee of the Central Bank of Nigeria has voted in its February 2023 meeting to raise its monetary policy rate (MPR) to 18% from 17.5%, representing a 50 basis points increase.
This was announced by the governor of the central bank, Godwin Emefiele at a press briefing following the end of the second monetary policy committee meeting for the year held on Tuesday 21st, 2023.
This is the second interest rate hike in 2023 suggesting the apex bank is continuing with the hawkish rate policy started in the second half of 2022.
The decision of the CBN is made on the back of the rising inflation rate in the economy. Headline inflation rose to 21.91% in February 2023 from 21.82% recorded in the previous month, representing its highest level since September 2005.
Highlights of the Committee’s decision
- Increase MPR by 50 basis points to 18%
- The asymmetric corridor of +100/-700 basis points around the MPR was retained CRR was retained at 32.5% While the Liquidity Ratio was also kept at 30%
- Addressing the fears of the effect of the hawkish stance on the banking industry, the CBN governor noted the bank’s stringent micro and macro-prudential guidelines have ensured that the stability and sustenance of the banking system are not at risk despite the hawkish stance.
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By Oladi Samuel