The Central Bank of Nigeria, CBN Governor, Mr. Governor Emefiele, has said that the apex bank will continue to raise the Monetary Policy Rae, MPR until the inflation rate abates.
Emefiele, dropped the indication while speaking on the outcome of the apex bank’s Monetary Policy Committee, MPC, meeting concluded on Tuesday in Abuja.
The CBN, at the meeting raised the MPR, by 100 basis points to 16.5 per cent from 15.5 per cent.
The MPC, however, retained the Cash Reserve Ratio, CRR, at 32.5 per cent, Liquidity Ratio at 30 per cent, with the asymmetric corridor at +100/-700 basis point around the MPR.
Explaining the rationale for the further hike in the MPR, Emefiele said that the persistent rise in inflation is hurting economic growth and the driving factors are still existing.
He stated: “We believe that at 21.9 percent inflation is already hurting economic growth. If we did not see this high level of inflation in the last seven months we would have been damned optimistic that growth would have hit close to 4.0 percent.
But because of the aggressive rate of rise in inflation, it is hurting economic growth at this level in Nigeria and that is the reason you would see that we are taking this very seriously because whether you would even try to either loosen or hold rates low what you would find is that inflation rate at this kind of levels of above from 14 to 15 per cent into 21 per cent economic growth would either decelerate or at best will be very very weak, would not be at a moderated level.”