In an ongoing effort to curb inflation and relieve pressure on the naira, the Monetary Policy Committee of the Central Bank of Nigeria voted on Tuesday, to increase the benchmark interest rate by 100 basis points to 16.5 per cent, the highest since 2001.
This was announced by CBN Governor Godwin Emefiele at the conclusion of the Monetary Policy Committee meeting in Abuja.
The MPC said the tightening would curb a higher rate of inflation and restore investors’ confidence.
Along with maintaining the MPR’s asymmetrical corridor at +100 and -700 basis points, the committee opted to keep the Cash Reserve Ratio (CRR) at 32.5 percent.
The apex bank also retained the 30 per cent liquidity ratio.
The central bank has maintained its strong attempts in the foreign exchange market to support the country’s plunging currency, even as inflation rate continued to rise.
In October, Nigeria’s inflation rate reached a 17-year high of 21.09 percent.
Peoples Gazette reports in October that the apex bank had announced intentions to redesign naira notes as part of efforts to stabilize the country’s sinking currency.
In order to absorb liquidity, the CBN boosted the cash reserve requirement (CRR) early this year to a minimum of 32.5 per cent.