THE Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has once again voted to increase the benchmark interest rate (monetary policy rate) to 15.5 per cent, from 14 cent.
This was revealed by the Central Bank Governor, Godwin Emefiele, today while reading the communique of the monetary policy committee meeting.
The apex bank, however, retained the asymmetric corridor of +100/-700 basis points around the MPR, but raised the cash reserve ratio (CRR) to a minimum of 32.5 per cent, while keeping the liquidity ratio at 30 per cent.
This year alone, the CBN has raised its interest rates thrice in a bid to battle the inflation figures, which currently stands at 20.52 per cent.
On January 25, 2022, the MPC voted to retain the benchmark interest rate (MPR) at 11.5 per cent.
On Tuesday, May 24, 2022, it raised its lending rate to 13 per cent, citing rising global inflation.
On July 19, 2022, the apex bank interest rates increased to 14 per cent, with Emefiele stating at the meeting that the committee would continue to increase the benchmark rate if it would tame rising inflation concerns.
The News Editor of the BusinessDay newspaper, Femi Asu, reacting to the new 15.5 per cent rate, tweeted, “The Central Bank of Nigeria has increased its key interest rate for the third straight time this year to 15.5 per cent, the highest in almost 17 years.”
The Central Bank of Nigeria has increased its key interest rate for the third straight time this year to 15.5 percent, the highest in almost 17 years. #CBN
— ‘Femi Asu (@asufemi) September 27, 2022
An economist, Kalu Aja, called for the CBN chief’s resignation on the social microblogging site, Twitter.
Aja wrote, “Mr Emefiele, you ‘lent’ N15 trillion to the FGN. You ‘lent’ N9 trillion to selected entities. Then you raised rates to 15 per cent on all. No SME producing locally can survive with 15 per cent+ interest rates. Your personal politics have clouded your judgment as the Central Bank Governor. You should resign.”
You “lent” N15t to the FGN. You “lent” N9t to selected entities.
Then you raised rates to 15% on all
No SME producing locally can survive with 15%+ interest rates
You personal politics have clouded your judgment as the Central Bank Governor
You should resign
— Kalu Aja (@FinPlanKaluAja1) September 27, 2022
Emefiele said the apex bank would implement aggressive cash reserve requirement “CRR” measures by mopping up liquidity from commercial banks by Thursday latest.
He warned banks to fund their accounts immediately, adding that banks that failed to do so would be denied access to the foreign exchange market.