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CBN Raises Interest Rate To 17.5%, Insists On January 31 Deadline For Old Notes

The  Central Bank of Nigeria (CBN) has raised the monetary policy rate (MPR), which measures interest rate, from 16.5 percent to 17.5 percent to rein in inflation “aggressively”.

The CBN  Governor, Godwin Emefiele,  announced this after the apex bank’s Monetary Policy Committee (MPC) meeting in Abuja on Tuesday.

The MPC raised the monetary policy rate by 100 basis point to 17.5% and kept the asymmetric corridor at +100/-700 basis points around the MPR.

The MPC retained Cash Reserve Ratio (CRR) by 32.5% while liquidity ratio is kept at 30%.

Emefiele said MPC “members welcome the recent deceleration of the year-on-year headline inflation, noting that the persistence in policy rate hike over the last few meetings of the committee have started to yield the expected decline in inflation.”

The CBN governor said the committee considered perennial scarcity of Premium Motor Spirit known as petrol, the 2023 general elections, continuous rise in energy prices, exchange rate pressure as well as continuous rise in insecurity.

“One member voted to increase the MPR by 150 basis points, four members by 50 basis points and seven members by 100 basis points. In summary, MPC voted to raise MPR to 17.5 percent,” the CBN governor said.

Emefiele said the committee also voted to retain the asymmetric corridor at +100 and -700 basis points around the MPR.

In addition, the committee also voted to retain the cash reserve ration (CRR) at 32.5 percent and keep the liquidity ratio at 30 percent.

‘JAN 31 DEADLINE STILL STANDS’

Speaking on the January 31 deadline for the phasing out of old naira notes, Emefiele insisted that the date remains sacrosanct.

He also said the time given for the deposit of the old naira notes was enough for Nigerians to go to commercial banks and get new notes.

“I don’t have good news for those who feel we should shift the deadline; my apologies,” he said.

“The reason is because 90 days should be enough for those who have the old currency to deposit it in the banks.”

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