As the country battles with the high inflation rate and fuel scarcity, the Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR) at 11.5 per cent. Also, the bank said that the gains of economic growth that the country recorded as a result of lifting the COVID-19 restrictions are being eroded by the Russian-Ukraine crisis.
The bank after its Monetary Policy Committee (MPC)'s meeting on Monday in Abuja declared that pushing borrowing costs to restrictive levels would not favour Nigeria's economic recovery from the Covid-19 pandemic as Nigeria's inflation is currently at 15.7 per cent which is above the single-digit targeted by the CBN. The Governor of CBN, Godwin Emefiele explained that the sanction imposed on Russia by NATO and the United States would have a significant downside risk on the global economy.
The governor blamed the high energy prices experienced in the country on the Russian-Ukraine conflict, explaining that the MPC noted that the spike in energy prices have aggravated Nigeria's inflation. At the MPC meeting, three members voted for a 25 basis points increase, one member voted for a 50 basis points increase, and six members voted for the retention of the rates.
Emefiele also informed that the poor electricity supply in the country by DISCOS had compounded the country's inflationary pressure. According to him, based on these considerations, the MPC retained the Monetary Policy Rate (MPR) at 11.5 per cent; asymmetric corridor at +100/–700 basis points around the MPR; Cash Reserve Ratio at 27.5 per cent; and Liquidity Ratio at 30.0 per from inside business
