MPC: CBN Shoots Up Benchmark Interest Rate To 14%

Illegal Conversion Of Currency: CBN Makes More Clarifications
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In a bid to further rejig their rate of financial restriction, the Monetary Policy Committee (MPC) sector of the Central Bank of Nigeria (CBN) has on Tuesday maximised the Monetary Policy Rate (MPR) up to 14 per cent from its initial 13 per cent rate.

The CBN Governor, Godwin Emefiele had also announced that the MPC had also unanimously agreed to hold all other monetary policy parameters in a constant rate while the Asymmetric Corridor had been retained at +100 and -700 basis points around the MPR, the Cash Reserved Ratio (CRR) at 27.5 per cent and the Liquidity Ratio at 30 per cent.

Read Also: Why Emefiele Retained His Position As CBN Governor – Buhari

Emefiele explained that the parameters were retained to contend the rising trend of inflation in Nigeria.

The MPC considered the continued aggressive movement in inflation even after the rate hike at its last meeting.

Emefiele had also disclosed that members agreed not to consider both loosening and retaining rates at the existing levels. The CBN chief had also noted that  members felt that loosening will trigger the weakening of the exchange rate which could pass through to domestic prices.

“MPC did not also consider holding rates constant because a hold stance will suggest that the bank is not responding sufficiently to both the global and domestic price developments as inflation numbers continue to trend aggressively upward”, he added.

In another report, the Central Bank of Nigeria (CBN) has also debunked reports that it was planning to replace the Naira notes in circulation with digital currency, the eNaira.

The Director, Corporate Communications Department of the CBN, Mr Osita Nwanisobi, said in Abuja, at the weekend, that the statement purportedly made during a stakeholders’ engagement on eNaira adoption in Asaba, Delta State was incorrect.

He therefore called on the public to disregard the reports.

According to Mr Nwanisobi, the digital version of the Naira was meant to complement the notes and would exist simultaneously as a means of exchange and store of value.

On the benefits of adopting the eNaira, the spokesman noted that the digital legal tender aside from the safety and speedy features, would also ensure greater access to financial services by the underbanked and unbanked populace, thereby enhancing financial inclusion.

 

Africa Daily News, New York

 

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