- The Central Bank of Nigeria has increased interest rates to 15.5 per cent, the highest in 20 years.
- The CBN revealed the new rate during its Monetary Policy Committee meeting on Tuesday, September 27, 2022
- Also, the CBN said it would mop up excess cash from the system on Thursday, September 29, 2022, to save the naira from further depreciation
To mitigate the impact of inflation, the Central Bank of Nigeria (CBN) has raised the interest rates to a 20-year-high of 15.5 per cent.
The Monetary Policy Committee of the apex bank unanimously voted to raise the benchmark interest rate, also known as the monetary policy rate, to 15.5 per cent from 14 per cent, the third time this year due to rising inflation.
The CBN governor, Godwin Emefiele, on Tuesday, September 27, 2022, announced the new rate at the MPC meeting.
In its last MPC meeting, the CBN raised the interest rate from 11.5 per cent to 14 per cent.
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The recent rate hike was unexpected as inflation surged to a 17-year-high in Nigeria, analysts say.
Main points of the meeting
- MPR raised by 150 basis points from 14% to 15.5 per cent.
- The asymmetric corridor of +100/-700 basis points around the MPR was retained.
- CRR increased to a minimum of 32.5 per cent.
- The liquidity Ratio was also kept at 30 per cent.
CBN to mop up excess liquidity on Thursday
The CBN also stated it would implement aggressive cash requirements measures by cleaning up excess liquidity from commercial banks by Thursday, 29, 2022.
Emefiele asked banks to fund their accounts immediately.
He said that banks that cannot fund their accounts would not have access to the forex market.
According to reports, CBN believes too much cash in the system is the reason for the depreciation of the naira.
CBN provides updates on BVN rules, discloses penalties for financial institutions, customers for violation
Recall that Legit.ng has reported that the Central Bank of Nigeria has published an updated revised regulatory framework for Bank Verification Number(BVN) operations warning violators will be sanctioned.
According to the CBN, the framework specifies the activities of BVN, as well as the formation and operation of a Watch-list for the Nigerian Banking Industry, in order to combat the rising incidence of fraud and boost public trust in the banking industry.
The CBN announced this in a circular sent to all deposit money banks, mobile money operators, super agents, and payment service providers on Tuesday, October 12th, headlined 'Issuance of the new regulatory framework for Bank Verification Number operations and watch-list for the Nigerian banking industry'.