The Monetary Policy Committee of the Central Bank of Nigeria(CBN) has increased the benchmark interest rate to 18 per cent, which is 500 basis point from it’s precious decision.
This was disclosed Tuesday in Abuja by the CBN Governor, Godwin Emefiele, during the presentation of the communiqué after the second MPC meeting in 2023.
Emefiele, while presenting the communique to journalists said the committee voted to increase the benchmark interest rate to 18 percent from 17.5 percent.
The Apex Governor also disclosed that the committee voted to retain all other parameters.
“Members, thus, resolved by a majority vote to raise the Monetary Policy Rate (MPR) by 50 basis points. In Summary, ten (10) members voted to raise the MPR by 50 basis points, one (1) member voted to raise the MPR by 25 basis points and one (1) member voted to hold the MPR. All members voted to keep all other parameters constant”.
Justifying the increase, Emefiele said committee’s findings revealed that a further increase in the MPR posed no grave danger to the banks.
He said, “The MPC examined the possible impact of further policy rate hikes on the stability of the banking system and was convinced that further hikes would not adversely impact the stability of the banking system. The Committee, however, called on the Bank’s Management to strengthen its regulatory oversight on the banking system to ensure that the banking industry remain stable and resilient”.
The Governor said a look at the financial Soundness Indicators, the MPC was comforted that it’s decisions on previous increases of MPR have had impact on inflation which has plateaued in the country.