The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has revealed that the Monetary Policy Rate (MPR) will be retained at 11.5% following a meeting with the Monetary Policy Committee (MPC). The MPC voted unanimously for the MPC to remain unchanged amid rising inflation.
This means the interest rate for loan remain the same without an upward or downward movement. It had been previously cut to 11.5% from 12.5%. The MPC met on Monday and Tuesday this week, to vote on the new rate for the quarter. Emefiele revealed the final the decision of the MPC during a live broadcast on CBN's Twitter handle page, which was monitored by AllNews.
Just as MPR was left unchanged, other parameters, Cash Reserve Ratio (CRR), Liquidity ratio, and asymmetric corridor were also retained by the MPC.
The governor of the CBN and the MPC blamed EndSARS protest for the rising inflation which has increased the cost of living across the country. The Nigerian Bureau of Statistics (NBS) had disclosed that food inflation rose to 13.22% in August 2020 from July inflation rate which was pegged at 12.82%.
Aside from the EndSARS protest, the CBN's MPC also cited structural policies and increase in petrol price as factors that influenced the rise of inflation. Also, food inflation rose also, moving to 14.23% in October 2020, rising from the 13.71% in September 2020.
The inflation is believed to have influenced the MPC decision to retain MPR rate, in order to encourage borrowing, which will ensure continuation of production, business operation, and prevent jobs losses.