The Central Bank of Nigeria has raised the monetary policy rate to 18.75 per cent to tame the country’s rising inflation.
The decision was reached on Tuesday at the Monetary Policy Committee meeting chaired by the acting CBN Governor, Folashodun Adebisi Shonubi.
Eleven members of the committee attended the meeting, according to the acting CBN governor.
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Shonubi in June began the partial undoing of some of Godwin Emefiele’s unorthodox monetary policies.
Nigerians have not celebrated a win over inflation which has worsened to 22.7 per cent in June. The National Bureau of Statistics computed the rate without factoring in the impact of the fuel subsidy removal and naira depreciation.
At the last Monetary Policy Committee meeting under Emefiele, the rates were increased to 18.5 per cent from 18.0 per cent.
Inflationary prices remained elevated in most countries despite broad measures to redeem the markets, Shonubi said.
According to him, the International Monetary Fund reversed global economic growth to 3 per cent from 2.8 per cent.
However, in the local market, the Acting CBN boss said, subsidy removal and unification of the exchange rate had led to an uptick in inflation.
Shonubi said the key development that would continue to influence inflation are the new policy decision of subsidy removal and naira unification.
He admitted that there are pressures on foreign exchange that precipitate uncertainties in the economy.
The CBN boss forecasted that the economy will continue to recover at 2.66 estimate. According to him, the continued uptick in inflation led to a call for decisive measures to address inflationary pressure.
The MPC enjoined the Federal Government to sustain growth by boosting of non-oil revenues.
In its decisions, members considered inflation and its effect on output growth. They remained cautious in their decision to moderately increase the rate.
According to the CBN boss, 6 members voted to raise MPR, while 5 voted to hold rates. They decided to reduce the asymmetric corridor at 100-300 from +100 to -700 basis points around the MPR which is 18.75.