Monetary Policy Review – MPC Hikes Benchmark Rate to 14.00%

The Monetary Policy Committee (MPC) concluded the fourth meeting for the year on the 19th of July 2022 and decided to increase the benchmark interest rate by 100bps from 14.00%, while holding all other policy parameters constant.

Source: CBN, Alpha Morgan Research

Specifically, the committee:

  1. Expanded the Monetary Policy Rate (MPR) to 14.00%.
  2. Retained the Asymmetric corridor around the MPR at +100/-700bps.
  3. Retained the Cash Reserve Ratio (CRR) at 27.5%.
  4. Retained the Liquidity Ratio (LR) at 30.0%.

This hawkish position taken by the CBN, is a bid to curtail inflation as the apex bank is seriously concerned about the rising price levels a measure is needed to reverse said surge while still promoting growth in the economy.