We provide Instant breaking news alerts and information about the day's most talked-about stories around Nigeria, Africa and the world trending news.
The Central Bank of Nigeria (CBN) says its Monetary Policy Committee (MPC) decision to increase Monetary Policy Rate (MPR) is to control rising inflation.
Hassan Mahmoud, CBN’s director, Monetary Policy Department said this on Wednesday at a post-MPC briefing tagged: “Unveiling Facts behind the Figures’’.
The News Agency of Nigeria (NAN) reports that the MPC, in its 287th meeting on Tuesday, had increased the MPR by 150 basis points, from 14 per cent to 15.5 per cent.
The MPR is the baseline interest rate in an economy on which other interest rates within that economy are built.
The CBN Governor, Mr Godwin Emefiele had said that the decision was informed by a persistent rise in the inflation rate and fragile economic growth.
According to Mahmud, the MPC got to a point where stringent measures have to be taken to control inflation.
He said that the committee took cognisance of global as well as local economic issues in arriving at its policy decisions.
“We raised the MPR because it is necessary to do so. The quantity of money in the system was too much for the economy to absorb,’’ he said.
Related Posts
Read Also: CBN increases interest rate to 15.5%
He said that monetary policy tools were meant to deal with short-term risks, adding that the idea was to make the cost of funds expensive to drive down inflation.
According to Mahmud, the stimulus that governments across the world provided for their citizens during COVID-19 increased the ability of people to spend, thereby, creating challenges with global supply.
“A lot of households and small businesses were injected with stimulus; the U.S did two trillion dollars, Nigeria did about five trillion Naira, these increased the ability of people to spend.
“But the supply side could not meet up with the demand because that volume of injection was far more than the regular intake for those economies, this made prices go up,” he said.
He also blamed the Russian-Ukraine war, as well as the resurgence of COVID-19 in China as responsible for the rise in global inflationary trend.
(NAN)
MPC increased rates as measure to control inflation – CBN
