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HomeBusinessCBN retains interest rate at 11.5%, asks NNPC to ensure adequate fuel...

CBN retains interest rate at 11.5%, asks NNPC to ensure adequate fuel supply

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The Central Bank of Nigeria (CBN) on Monday retained its monetary policy rate (MPR), the benchmark interest rate at 11.5 percent after its Monetary Policy Committee (MPC) meeting.

CBN Governor, Godwin Emefiele said the committee members voted to hold key rates steady.

The committee also unanimously retained key rates, with the asymmetric corridor of +100/-700 basis points around the MPR and retain the cash reserve ratio (CRR) at 27.5 percent as well as the liquidity ratio at 30 percent.

Emefiele said the MPC remains concerned that the global situation on rising prices may continue in the near term but may begin to moderate if deliberate and urgent actions are taken by both monetary and fiscal authorities to correct rising inflation.

Emefiele said the high energy prices experienced by the country was due to the Russian-Ukraine conflict — and aggravated Nigeria’s inflation.

“MPC noted with concern the impact which the global price increase in petroleum and other products is having practically on all economies.

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“The Committee further noted that this has resulted in imported inflation on the Nigerian economy and believes that specific actions need to be taken to ensure that this trend does not continue given the adverse consequences and aggressive rising price level could have on the cost of living and purchasing power of Nigerians.

“Before the Russia-Ukraine war, MPC was optimistic that the moderate decline in inflation was sustainable due to the positive impact of good harvest on price levels. The MPC worries that,
whereas global prices have gone up, this has been compounded by the shortage of supply of petroleum products.

“In the short run, MPC urges NNPC to take urgent steps to ensure an adequate supply of petroleum products in Nigeria so as to reduce the rate of arbitrary increase in the price of petroleum products by oil marketers.

“The Committee noted, with grave concern, the unprecedented rate of oil theft recorded in recent time, and its debilitating impact on government revenue and accretion to reserves,” the governor said while speaking to journalists after the MPC meeting in Abuja.

According to him, the committee said given the fragile state of the current GDP growth and the potential external and domestic headwinds from the Russia- Ukraine war, a contractionary policy stance would stifle the expected investment expansion.

At its last meeting in January, the committee alsoretained the country’s key lending rate to support economic recovery after COVID-19 lockdowns.

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