MPC Walks Emefiele’s Path, Hikes Interest Rate To 18.75%

BY EDMOND ODOK – As the battle to tame the country’s galloping inflation continues in the post-Godwin Emefiele’s era as Central Bank of Nigeria (CBN) Governor, the Monetary Policy Committee (MPC) on Tuesday raised the Monetary Policy Rate (MPR) to 18.75 percent

The MPC decision came on the day that the Department of State Service (DSS) operatives clashed with officials of the Nigerian Correctional Services over the custody of Emefiele who was granted N20 million bail by the Federal High Court sitting in Ikoyi, Lagos

Rising from its meeting chaired by the acting CBN Governor, Folashodun Adebisi Shonubi, the MPC voted to adjust the asymmetric corridor at +100 and -300 basis points around the MPR.

Acting Governor Shonubi, who read the communiqué while addressing journalists at the end of the two-day meeting in Abuja, said; “In summary, the MPR voted to raise the policy rate by 25 basis points from 18.5 to 18.75 percent.”

Shonubi said eleven members of the committee at the meeting noted inflationary prices remained elevated in most countries despite broad measures to redeem the markets, adding that the development has seen the International Monetary Fund (IMF) reversing global economic growth to three (3) percent from 2.8 percent.

The apex bank Chief also stated that subsidy removal and unification of the exchange rate had led to an uptick in inflation, noting that the new policy decision of subsidy removal and Naira unification remain key development that would continue to influence the rate of inflation nationwide

While admitting that there are pressures on foreign exchange that precipitate uncertainties in the economy, Shonubi said the economy will continue to recover at a 2.66 estimate with the continued uptick in inflation calling for decisive measures to address inflationary pressure.

Further explaining the MPC members considered inflation and its effect on output growth, particularly being cautious to moderately increase the rate, the CBN boss said generally the Committee is urging the Federal Government to sustain growth by boosting its revenue from the non-oil sector