CBN Hikes Monetary Policy Rate To 15.5%

The Monetary Policy Committee (MPC) of the CBN increased Monetary Policy Rate (MPR) from 14 per cent to 15.5 per cent on Tuesday to stem the tide of inflation.

The committee had increased the MPR by a total of 250 basis points at its last two meetings.

The MPR is the baseline interest rate in an economy; every other interest rate used within that economy is built on it.

CBN Governor, Mr Godwin Emefiele, announced the new rate after the September bi-monthly MPC meeting in Abuja.

This is the third consecutive hike of the MPR, the benchmark interest rate for the country’s financial market in 2022.

The MPC also raised Cash Reserve Ratio to 32.5 per cent from 27.5 per cent while holding other parameters constant.

The Asymmetric Corridor, thus, remains at +100/-700 basis points around the MPR, and the Liquidity Ratio remains at 30 per cent.

Asymmetric interest rate corridor is a new tool developed to increase the flexibility of monetary policy.