CBN increases rate to 18%
Central Bank of Nigeria (CBN) has voted to increase the benchmark interest rate by 50 basis points to 18. percent.
CBN Governor Godwin Emefiele said this while reading the communiqué of the second Monetary Policy Committee (MPC) meeting on Tuesday.
He said the committee also pegged the liquidity ratio at thirty percent.
Emefiele said the tightening of the rate is expected to curtail inflation currently put at twenty-one percent.
He explained that the CBN aligns itself with the Supreme Court’s judgment as currency in circulation (redesigned naira) is about one trillion naira.
The CBN governor said that the bank will continue to pump more currency into the system but with caution.
Emefiele expressed confidence in the commercial banks and noted that they have remained resilient with the capital requirement at thirteen percent, nonperforming loans at four point two percent, and a cash reserve of the banks raising to fourteen trillion naira.