The Central Bank of Nigeria (CBN) has disclosed plans to redesign some Naira notes.
TheNewsGuru.com (TNG) reports CBN Governor, Godwin Emefiele disclosed this at a special press briefing in Abuja on Wednesday.
The Naira notes to be redesigned are the 200, 500 and 1000 Naira notes.
According to Emefiele, the redesign will take effect from Thursday, December 15, 2022.
The International Banking Conference of the United Bank for Africa (UBA) Plc will kick off in New York, United States of America (USA) with the arrival and registration of delegates today.
TheNewsGuru.com (TNG) reports that the four-day conference, which will be held between October 17th and 21st, 2022 on the New York Hudson River in the United States of America, will be hosted by UBA America – the US branch of Africa’s Global Bank.
Lined up for the event are Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele; the Group Managing Director/Chief Executive Officer, United Bank for Africa (UBA) Plc, Oliver Alawuba and other experts from the global international markets, who will lead discussions on global economic trends at the 2022 edition of the UBA Group International Banking Conference.
The highly anticipated event will see the convergence of senior representatives from leading African Banks, Sovereigns, Central bankers and key players in the US financial landscape.
Other speakers at the event include the Executive Director UBA Group/CEO UBA America, Sola Yomi-Ajayi, Director & Global Head Trade Finance, Afrexim Bank, Gwen Mwaba, Director, Regulatory and Finance Crimes Compliance, Exiger, Derik Riesche, as well as a host of other notable financial, non-financial and compliance experts.
Participants will seek to address pressing financial challenges while also brainstorming on solutions to the industry’s key challenges and opportunities. They will also explore correspondent banking innovations in a rapidly evolving international banking ecosystem.
Other issues around correspondence banking, Trade Finance, US Dollar clearing & payments, cross-border and transit payments will also be discussed at the conference.
Host of the event, Sola Yomi-Ajayi, expressed the bank’s readiness to welcome participants from all over the world to this all-important conference and announced that delegates will also have the opportunity to network while also acquiring tactical strategies to transform their correspondence banking initiatives and unlock new business opportunities.
Yomi-Ajayi said, “Given our presence in key global financial centres particularly in New York where UBA is the only African Bank with a US Federal Banking license, UBA is providing much needed Correspondent Banking solutions to African Financial Institutions thereby contributing to the development of Africa and providing access to global financial markets.
“Through this conference, we are bringing together bankers from Central and Commercial banks across Africa, as well as experts from the US financial services industry to brainstorm key challenges and innovations in a rapidly evolving international banking ecosystem.”
She explained that there will also be networking and one-on-one stakeholder engagement opportunities with UBA executives with international banking, payments and trade Services, US Dollar Wire Clearing and payments expertise and Network and deepen relationship between UBA’s International offices and other African banks.
“As you may well know, UBA is not just about banking, we are committed to ensuring sustainability of the African continent through promotion of financial inclusion, forging strong partnerships while also contributing to the development of sustainable financial markets on the African continent. An international conference such as this demonstrates our commitment to Africa, facilitates knowledge sharing and capacity building for African institutions,” she added.
TNG reports UBA is a leading Pan-African financial institution, offering banking services to more than twenty-five (25) million customers, across 1,000 business offices and customer touch points in 20 African countries.
With presence in New York, London, Paris, and Dubai, UBA is connecting people and businesses across Africa through retail, commercial and corporate banking, innovative cross-border payments and remittances, trade finance and ancillary banking services.
Following the Central Bank of Nigeria (CBN) hiked Monetary Policy Rate (MPR) to 15.5 percent, the highest ever in 20 years, Nigerians stand to face harder times.
The increase came yesterday at the end of its Monetary Policy Committee meeting, which started on Monday in Abuja.
CBN Governor, Godwin Emefiele, who announced the new rate, said it was, among others, intended to rein in inflation, which now stands at 20.52 percent.
Members of the MPC also agreed at the meeting to raise the Monetary Policy Rate (MPR) to 15.5 percent; retain the asymmetric corridor at +100/-700 basis points around the MPR; increase the Cash Reserve Ratio (CRR) to a minimum of 32.5 percent, and retain the Liquidity Ratio at 30.0 percent.
Emefiele also threatened that banks that fail to voluntarily fund their accounts by tomorrow to match the new CRR of 32.5 percent would be penalised.
The measures have, however, met with varied reactions. The implication of the measures is the fear that raising the MPR will directly impact the fortunes of the manufacturing sector.
The direct fallouts of the measures, among others, are loss of jobs and non -recruitment of additional workforce.
Experts also harped on the increasing disparity the CBN measures would cause on the foreign exchange rate.
One of the experts, Muda Yusuf of the Centre for the Promotion of Private Enterprise, described the developments as “a double whammy” for manufacturers.
He said: “We must forget that businesses are already grappling with so many problems, especially because of the high exchange rates, forex scarcity, currency depreciation, cost of diesel, and insecurity.
“Cost of operation will go up and inflation will still remain high if not higher. What guarantee does the CBN have that this increase in interest rate will curb inflation?
“Definitely, the CBN has not considered if we have borrowed money from the banks to invest. So, it’s not good news at all that CRR increased to 32.5 percent.
“What it also means is that the increase will further tighten the financial system because 32.5 percent CRR is one of the highest in the world.
“It is going to affect what you call financial intermediation, which is the major function of banks.
“What the CBN should have done is to also reduce its own fiscal deficit financing. That’s an even bigger problem for liquidity. Is it not the CBN that is providing the ways and means it is almost N20 trillion now?
“Things like this have very serious implications for inflation. I think that it is essential that CBN addresses this because it is not within the domain of the commercial banks or the banking systems, but within the remit of the CBN and the fiscal authorities.
“CBN is talking as if it is only CBN tools that can solve the problem of inflation whereas it is just causing unnecessary problems for investors who are indebted to the banks and to those who want to borrow money.”
But Emefiele, who stressed CBN’s resolve to implement the measures, said: “Whether you raise the rate or not, what will happen is that consumption and investment will be affected because the purchasing power of the consumer will derail or completely dissipate.
“You don’t have a choice but to raise rates. This is the best option at this time. We believe it will rein inflation.
“As long as we see inflation going upward, MPC cannot give any assurance that we will not continue to raise rates because we’ve seen rates move up very aggressively.
He added: “The MPC needed to move in aggressively to ensure what can be done to rein in inflation. I cannot assure you that we will not raise the rate as long as inflation continues to trend upward.
“The easiest way to tame inflationary pressure is to raise the interest rate. This is the right way to go. You have to try as much as possible to raise your rates to a level that is equal or higher than inflation.”
Emefiele also admitted that the new rate may retard growth and make the cost of borrowing more expensive.
The CBN boss lamented that with the inflation rate higher than the interest rate, what Nigeria was grappling with now was a case of negative interest, “which in itself is a disincentive to investment.
He argued that to check the development, “it is imperative that interest rate be raised to rein in inflation.”
With regards to the 32.5 percent minimum Cash Reserve Ratio, Emefiele said: ”what it means is that we expect that all the banks in Nigeria must fund their accounts by Thursday (in 48 hours) because we will debit them for CRR.
“We will take their CRR to a minimum of 32.5 percent, which means we are going to take liquidity out of their vaults by Thursday. If any bank fails to meet up with this expectation, the decision of the MPC is that we may need to preclude those banks from the foreign exchange market on Friday and onward until they meet this 32.5 percent.”
Emefiele pointed out that the measure “is meant to underscore the fact that this very aggressive decision to rein inflation must yield result.
He said: “We do not want to face Nigerians in the next few months and begin to take the blame for not being able to rein in inflation in spite of all the rates we have raised.
“So, we have decided to adopt a two-pronged approach; increase MPR and CRR going up because we must mop liquidity effectively out of the vaults of the banks.”
Asked when inflation would decelerate, Emefiele said: “Our view is that the last period should be within the next two to three months. This is September, and as we begin to get into October, November, and December, we should begin to see the rates begin to decelerate.
“They will make it possible to achieve this because we believe that with liquidity out, it will constrain using the money for speculative purposes because we are not going to sit down and allow people go into their bank accounts and take naira to speculate against the currency. We will not allow it.
“We will take the monies out of the vaults of the banks so that speculative use of naira can completely be tamed in the economy.”
Emefiele, who also noted that “available data on key macroeconomic variables indicate that output growth will continue for the rest of 2022,” admitted that it would be “at a much-subdued pace.”
He also listed that some of the domestic shocks to the economy.
They include the high level of insecurity currently disrupting the free flow of economic activities; heightened sovereign risk as the 2023 general elections approach; continued upward pressure on inflation, driven by exchange rate pressures, amongst other domestic factors.
Emefiele added: “In addition, domestic price development is expected to maintain the current upward trend in light of the build-up of increased spending and demand for money, as the 2023 general elections approach. Accordingly, the Nigerian economy is forecast to grow in 2022 by 3.52 percent (CBN), 4.20 percent (FGN), and 3.40 percent (IMF),” the CBN governor said.
On the performance of the eNaira, Emefiele said the digital currency “has almost hit the one million mark on download.
He added: “So far, 905,558 have downloaded the App out of which, 282,600 are currently active. So far, counts of transactions have exceeded 1.49 million worth N3.484 billion.”
Emefiele also said the Bilateral Air Services Agreements (BASA) never made it compulsory for CBN to provide FX for repatriation of foreign airlines income, adding that they should freely obtain such FX from the Exporters and importers’ Window through their banks. The CBN would continue to treat airlines with priority and would clear the backlog.”
Close to one year after the launch of the eNaira project, the governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, at the Grand Finale of the eNaira Hackathon, announced the commencement of the second phase of the project.
TheNewsGuru.com, (TNG) recalls in October 2021, the CBN introduced the eNaira wallet to enhance financial inclusion.
According to the Nigeria Economic Update, the weekly newsletter of the Centre for the Study of Economies of Africa (CSEA), as at August 2022, the eNaira wallet has been downloaded about 840,000 times, with around 270,000 active wallets (including over 252,000 consumer and 17,000 merchant wallets) created.
Moreover, over 200,000 transactions valued at N4.4 billion have occurred on the platform. The second phase aimed to improve financial inclusion by enrolling the unbanked and underserved through offline channels.
With the eNaira wallet, Nigerians can conduct transactions on their mobile phones by using the Unstructured Supplementary Service Data (USSD) code*997. For a population with over 50 million active bank accounts, the registration for the eNaira wallet is relatively low in proportion to the country’s economic size. Therefore, it is imperative for the CBN to collaborate with fintech organisations to plan and organise events aimed at restoring public trust in the eNaira.
Consequently, the downloads and registration on the platform should increase with improved confidence and clarity on the advantages of using the wallet. Hence, an appropriate private sector collaboration could also ensure wider acceptance of the eNaira for economic activities.
The National Youth Council of Nigeria (NYCN) has blamed CBN Governor, Godwin Emefiele over the free-fall of Nigeria’s currency, the Naira.
The body blamed the poor economic management policies Emefiele as responsible for poor performance of Naira against major global currencies.
This was contained in a statement on Sunday by NYCN President, Comrade Solomon Adodo.
According to Comrade Adodo, statements credited to the CBN governor alleging that the current free-fall of the Naira against other major currencies was as a result of the non-remittances of dollars to the foreign reserve by the NNPC Ltd was faulty.
He said without highlighting the reality of the causative oil and non-oil related factors, including a drop in Nigeria’s crude oil production, growing petrol subsidy, an unsustainable dual exchange rate system, reduction in foreign direct investments and growing dependence on importation across many sectors of the economy was disingenuous and unpatriotic.
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The NYCN boss said Emefiele has completely failed to concentrate on his core mandate of price stability as the apex bank’s governor.
Adodo noted that with inflation at about 19 percent and the exchange rate nearing N800 to a dollar, the CBN governor should be held responsible for deepening poverty in the country as he continues to work at cross-purposes with President Muhammadu Buhari’s objective of reducing poverty and growing the economy.
He said the NYCN is shocked by the comment of the Governor associating the free-fall of the parallel market rates to NNPC, even though it is purely a monetary policy issue and outside the purview of the NNPC.
“As a youth group, we have noted that the inability of the CBN to promptly release Joint Venture (JV) cash call funding from the Treasury Single Account (TSA) even when the Nigeria National Petroleum Company (NNPC) Ltd had adequate cash cover, leading to the loss of JV Partners’ confidence to restore production and reap the benefits of today’s improved oil prices.
“We are in the know that for over three months now, dollar-denominated cash call payments amounting to over $400 million, properly processed, are yet to be paid by the CBN under Mr. Emefiele.
“The combined impact of CBN’s inability to promptly release JV cash call to restore production, the increasing losses due to crude oil theft, and production deferments has culminated in significant crude oil output losses of over 600, 000 barrels per day.
“We are taken aback that Mr. Governor is feigning ignorance that the country’s rising petrol subsidy cost, as well as the rising cost of external debt servicing, are all obligations affecting the economy. These affect the NNPC’s remittances to the Federation Account.”
“History shows that Mr. Emefiele is at sea on addressing monetary policy issues. We recall that in 2021, the CBN governor blamed Aboki FX for the depreciation of the Naira. He would later blame members of the Association Bureau De Change, which led to the stoppage of dollar sales to the group. At another time, he blamed the Naira’s depreciation on activities of money laundering, terrorism financing as well as politicians.
“Furthermore, Nigerians are bearing the brunt of the inaction of the CBN Governor as the Emirates Airlines, the flag carrier of the United Arab Emirates (UAE), has reduced its flight operations to Nigeria over the inability of the CBN to repatriate about $85 million in revenue. Was the failure to repatriate Emirates funds also caused by the NNPC?
“From all indications since his failed presidential bid as well as his rejection by the All Progressives Congress, a partisan Emefiele has been doing all to rubbish the achievements of President Muhammadu Buhari and this should no longer be permitted.
“As Nigerians concerned about the future of this country and before Mr. President heeds our clarion call to send Mr. Eemefiele packing from the CBN, we advise that the CBN considers among other options the World Bank’s recommendation of adopting a single market-responsive sustainable exchange rate, improving access to forex through well-defined periodic forex auctions, and signaling a renewed commitment to price stability as a primary goal of the apex bank.
“The NYCN further expresses the optimism that the NNPC’s transitioning into a limited liability entity in line with the provisions of the Petroleum Industry Act (PIA), and its regulation now in line with the provisions of the Companies and Allied Matters Act (CAMA) would help resolve cash call payments delays as the company is now exempted from TSA, among others.”
The Senator representing Ekiti South Senatorial District in the Senate, Senator Biodun Olujimi has said the Central Bank of Nigeria (CBN) under the leadership of Mr Godwin Emefiele has failed.
TheNewsGuru.com (TNG) reports Senator Olujimi said this while contributing to a motion moved by Senator Olubunmi Adetunmbi on the free fall of the Naira during plenary session of the Senate on Wednesday.
Reports had emerged that the Naira crashed further in the parallel market, trading for N710 against the U.S. dollar on Wednesday.
Checks on the exchange platform, Aboki Forex showed the current parallel market rate pegged at N710 to a dollar. The national currency traded for N670 against the dollar on Monday in the parallel market.
Angered by the development, the Senate, following deliberation on the motion, Senator Adetunmbi summoned Emefiele to appear at a plenary and address distinguished Senators in closed door.
Contributing on the motion, Olujimi said: “Someone should be able to say I have failed and that is the CBN”, adding that somebody should be penalislzed for what is happening to the Naira.
“Someone should be able to say I have failed and that is the CBN. Most of what is happening is because people are taking out the dollar and selling and bringing them back in.
“We should be penalizing somebody for what has happened to the Naira. The time has come for us to look holistically into what is happening.
“What is happening to the Naira is a replica of what is happening to Nigeria,” Senator Olujimi argued.
The Senate, on Wednesday, resolved to summon the Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, to educate and inform senators in a closed session on the reasons for the rapid depreciation of the value of the naira.
It also mandated the Senate Committee on Banking, Insurance and Other Financial Institutions to assess the impact of CBN intervention funds meant to support critical sectors of the economy.
The resolutions were reached by lawmakers after the upper chamber considered a motion sponsored by Senator Olubunmi Adetunmbi (APC – Ekiti North).
The motion was entitled, “State of CBN Intervention Funds and Free Fall Of Naira.”
Coming under Order 41 and 51 of the Senate Standing Order, as amended, Adetunmbi bemoaned Nigeria’s economic reality amid an urgent call for “extraordinary measures”.
He noted that the CBN through its numerous multi-sectoral intervention funds, provided special funds to support critical sectors of the economy.
He explained that in view of such interventions, it had become necessary to assess the state of implementation and effectiveness of the funds deployed for the purpose.
The lawmaker, recalled that the CBN in 2021, placed an indefinite halt on forex bidding by Bureau de Change operators (BDCS) and importers over allegations of abuse and mismanagement.
He observed that the halt by the CBN resulted in a spike of the exchange rate.
According to Adetunmbi, “the two instruments of Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) could only serve less than 20% of the total forex demand by travelers and businesses.”
He expressed worry that the import and export window meant to serve the forex needs of business giants, “has become a rare opportunity that only a privileged few can access.”
“These and a number of others have contributed to the excessive scarcity of forex in Nigeria today”, he added.
He noted that as at the 26th of July 2022 (yesterday), the exchange rate in the autonomous segment (BDCS) of the foreign exchange market is N670 to 1 United States Dollar and projected to end at N1000 by end of the year based on the current rate of depreciation.
He, therefore, advised the Central Bank to take new measures to curb forex scarcity and address the sliding rate of Naira exchange.
In his contribution, Senator Sani Musa (APC – Niger East), faulted the Central Bank’s decision to halt foreign exchange biddings, thereby cutting off the parallel market – Bureau de change operators.
According to him, the attempt by the CBN to control the value of the naira with the continuous exclusion of BDCs would only lead to its further depreciation.
He, therefore, advised the apex bank to rather ensure the regulation and monitoring of the parallel market.
“What CBN used to do was to give out $10,000 (USD) to each of these BDCs with a clear directive for it not to be sold above N470 as against the $419 exchange rate. It worked.
“But today, nobody is determining where the rate is going and I can assure you we can’t have that solution because we are only importing”, he said.
On his part, Senator representing Katsina North District, Senator Ahmad Babba-Kaita, said one way to improve the value of the naira was to encourage foreign investments to attract inflow of other currencies into Nigeria.
“The only way we can access the dollar will be determined by other economies and not ours”, he noted.
He, however, attributed the lack of foreign investments into Nigeria on the poor security situation caused by banditry, terrorism and other criminal activities.
The Senate, in its resolutions, called on the CBN to urgently intervene to stop the rapid decline in the value of the Naira vis-à-vis the Dollar and other international currencies.
It also mandated the Senate Committee on Banking, Insurance and Other Financial Institutions to conduct an assessment of CBN intervention funds and the declining value of Naira to come up with sustainable solutions.
The Senate, at the end of Wednesday’s proceedings, adjourned plenary till September 20th, 2022, for its annual recess.
The Nigerian Senate has summoned the Governor of the Central Bank of Nigeria, Mr Godwin Emefiele over the declining value of the Naira.
TheNewsGuru.com (TNG) reports that the summon followed a motion moved by Senator Olubunmi Adetunmbi on Wednesday during plenary on the state of the central bank intervention funds and the free fall of the Naira.
According to a resolution passed by the upper legislative chamber, following deliberation on the motion, Emefiele will come into plenary and address distinguished Senators in closed door.
The Senate in the resolution also urged its Committee on Banking, Insurance and other Financial Institutions to conduct an assessment on the decline in the value of the naira to come up with sustainable solutions.
Meanwhile, in the interim, the Senate called on the CBN to urgently intervene to stop the rapid decline in the value of the Naira in service to the dollar and other international currencies.
TNG reports the Naira on Tuesday depreciated at the Investors and Exporters window, against the dollar, exchanging at N431.
The figure represented a decrease of 0.90 per cent compared with the N427.17 it exchanged to the dollar on Monday.
The open indicative rate closed at N427.30 to the dollar on Tuesday.
An exchange rate of N444 to the dollar was the highest rate recorded within the day’s trading before it settled at N431.
The local currency sold for as low as N414 to the dollar within the day’s trading.
A total of 58.03 million dollars was traded in foreign exchange at the official Investors and Exporters’ window on Tuesday.
However, on Wednesday, the Naira crashed further in the parallel market, trading for N710 against the U.S. dollar.
Checks on the exchange platform, Aboki Forex showed the current parallel market rate pegged at N710 to a dollar.
The national currency traded for N670 against the dollar on Monday in the parallel market.
The House of Representatives has passed a Bill after second reading to stop the Governor of the Central Bank of Nigeria (CBN) from participating in future elections in the country.
Rep. Sada Soli, the sponsor of the Bill at plenary in Abuja on Tuesday said that the bill would add more conditions to the disqualification and appointment of the Governor, Deputy Governor and Director of the CBN.
According to him, why I am doing this is because there was a time the CBN Governor went to court seeking for an interpretation of whether he can participate in partisan politics.
“We need to address that. Today the credibility of CBN in custody of sensitive election material is being questioned.
“It is not against any individual but to save the integrity of CBN.”
He said that the bill would add more stringent conditions for the appointment or cessation of appointments of the CBN Governor, Deputy Governor as well as Directors of the Bank.
He said that the bill sought to amend the CBN Act 2007, adding that the amendment was no prejudice to anybody but because the Act was tested and it was found weak.
He added that the Act needed to be amended to strengthen the Apex Bank and restore its credibility from the shock it had suffered in the cause of interpreting the law.
The bill, however, scaled second reading after a voice vote put by the Deputy Speaker, Ahmed Wase, who presided over plenary.
Rising inflation rate which peaked at 18.6 per cent in June, unsettled members of Nigeria’s Monetary Policy Committee (MPC), resulting in a unanimous vote to tighten the Monetary Policy Rate (MPR) from 13 per cent to 14 per cent.
“Inflation is a terrible scourge and so we need to do more work on inflation. As long as we see inflation at a level that deters growth, the MPC is very determined that if it continues, we would continue to tighten rate,” Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele said.
TheNewsGuru.com (TNG), meanwhile, recalls that the last time MPR rose to 14 per cent was in 2016 when inflation rate was at 15.7 per cent.
The broad outlook for both the global and domestic economies in the medium-term remain clouded with uncertainties arising from the Russian-Ukraine war, lingering impact of the COVID-19 pandemic and substantial disruptions to the supply chain.
While the latest MPR is expected to adjust the supply of money in the economy and promote real Gross Domestic Product (GDP) growth, the implication for the manufacturing sector is increased level of interest rates on loanable funds.
Chief Executive Officer for Centre for the Promotion of Private Enterprise (CPPE), Muda Yusuf said that the tightening will only worsen the plight of entrepreneurs or those in production in the economy.
“Because many of them are indebted to the bank, it will mean they will review the credit and so it will go higher for those investors and it is not going to have an impact on inflation.
“This economy is not a credit driven economy and there is no way you can use monetary policy issues to solve these challenges.
“So, what they have done is create problems for investors who are battling with exchange rate, high cost of diesels, scarcity of foreign exchange, purchasing power among others,” Yusuf said.
Higher interest rate will also put pressure on input cost which will in turn cause business production to decline, and may lead to lay-offs and aggravate unemployment rate pegged at 33 per cent and worsen insecurity.
Director General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadri, noted that the increase in MPR would lengthen the journey towards the preferred single digit interest rate regime.
“MAN is, therefore, concerned about the ripple effects of this decision and its implications for the manufacturing sector that is visibly struggling to survive the numerous strangulating fiscal and monetary policy measures and reforms,” Ajayi-Kadri said.
However, MPC members believe that tightening will signal a strong determination of CBN to aggressively address its price stability mandate and portray the emphasis on sensitivity to the impact of inflation on the vulnerable households and the need to improve their disposable income.
Members also called on the Federal Government to seek a long-term and viable solution to strike a balance between the pricing and supply of Premium Motor Spirit (PMS) in the country and do more to increase food supply in order to check food inflation.
Indications have emerged on why the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) raised from 13 per cent to 14 per cent the Monetary Policy Rate (MPR), which measures the interest rate in the country.
TheNewsGuru.com (TNG) reports Mr Godwin Emefiele, Governor of the CBN announced the decision to raise the interest rate at a press briefing in Lagos State on Tuesday, following a two-day meeting of the MPC.
According to Emefiele at the press briefing, raising the interest rate was the right option considering economic realities.
“The committee resolved that the most rational policy option would be to further strengthen its tightening stance in order to effectively curtail the unabated rising trend of inflation,” Emefiele said.
He added: “Members were conscious of the fact that output growth remained fragile. However, not curtailing inflation now could erode the monetary gains achieved in improving consumer purchasing power and thus worsen the poverty level for the vulnerable populace”.
While the CBN increased the MPR rate, it, however, retained other parameters. The asymmetric corridor remains +100 and -700 basis points around the MPR, and the well as Cash Reserved Ratio (CRR) at 27 per cent.
“Committee thus vote unanimously to raise the Monetary Policy Rate (MPR). One member voted to increase the MPR by 150 basis points, six members by 100 basis points, one member by 75 basis points and three members by 50 basis points.
“Consequently, Committee resolved to increase the MPR by 100 basis points from 13 per cent to 14 per cent. In summary, MPC voted as follows:
“Increase MPR to 14% from 13, retain the Asymmetric Corridor at +100 and -700 basis points around the MPR, retain the CRR at 27.5 per cent and retain liquidity ratio at 30 per cent,” Emefiele said.
Tuesday’s rate hike marks the second time, the MPC will raise the interest rate in two months. The MPC increased the rate from 11.5 per cent to 13 per cent on May 24.