Final 2022 MPC Meeting: CBN Raises Interest Rate to 16.50%

The Monetary Policy Committee (MPC) held its sixth and last meeting of the year on November 22, 2022 and agreed to raise the benchmark interest rate by 100 basis points (bps) to 16.50% while keeping all other policy measures at their current levels.
The decision was made in light of the fragile economy and continued rise in the inflation rate. Headline inflation in Nigeria jumped from 20.77% to 21.09% in October 2022, the highest level in 17 years.
Specifically, the committee:

  1. Raised the Monetary Policy Rate (MPR) to 16.50%.
  2. Held the Cash Reserve Ratio (CRR) at 32.50%.
  3. Held the Asymmetric corridor around the MPR at +100/-700bps.
  4. Held the Liquidity Ratio (LR) at 30.0%.

To combat inflation in 2022, the CBN raised the MPR by a total of 500 basis points. At its meeting in May 2022, the CBN increased its benchmark interest rate by 150 basis points, to 13.00%, for the first time in six years. It was then increased by another 100 basis points in July to bring it to 14.00%, and by another 100 basis points in August 2022 to send it to 15.50%.

SOURCE: CBN, Alpha Morgan Research