‘Rising food prices will moderate on deliberate actions’ — CBN leaves benchmark interest rate at 11.5%

The policy-setting committee of the Central Bank of Nigeria (CBN) has retained the monetary policy rate (MPR), which measures interest rate, at 11.5 percent.

The monetary policy rate (MPR) is the baseline interest rate in an economy, every other interest rate used within an economy is built on the MPR.

Addressing journalists on Monday after the committee’s meeting at the CBN headquarters in Abuja, Godwin Emefiele, governor of the apex bank, said the committee members voted to hold key rates steady.

The committee also unanimously retained key rates, with the asymmetric corridor of +100/-700 basis points around the MPR and retain the cash reserve ratio (CRR) at 27.5 percent as well as the liquidity ratio at 30 percent.

Emefiele said the MPC remains concerned that the global situation on rising prices may continue in the near term but may begin to moderate if deliberate and urgent actions are taken by both monetary and fiscal authorities to correct rising inflation.

Emefiele said the high energy prices experienced by the country was due to the Russian-Ukraine conflict — and aggravated Nigeria’s inflation.

According to him, the committee said given the fragile state of the current GDP growth and the potential external and domestic headwinds from the Russia- Ukraine war, a contractionary policy stance would stifle the expected investment expansion.

At its last meeting in January, the committee also retained the country’s key lending rate to support economic recovery after COVID-19 lockdowns.