The Monetary Policy Committee of the Central Bank of Nigeria agreed to raise the benchmark interest rate by 50 basis points to 18. percent, stating that the increased interest rate is anticipated to reduce inflation, which is presently estimated to be 21 percent.
The CBN Governor, Godwin Emefiele, revealed this on Tuesday when reading the minutes of the second MPC meeting. He said that the committee set the liquidity ratio at 30% as well.
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Emefiele clarified that the bank agrees with the Supreme Court’s ruling regarding the redesign of the naira because there are about one trillion of the new notes in circulation.
He said that the bank will keep adding money to the system, albeit cautiously.
The head of the central bank voiced confidence in the country’s commercial banks, saying that despite having capital requirements of 13%, non-performing loans of 4.2 %, and an increase in cash reserves of the banks to 14 trillion naira, they have remained robust.
