CBN raises monetary policy rate to 17.5%

January 30, 2023

In its efforts to restrain inflation through monetary tightening, the Central Bank of Nigeria (CBN), has further raised the Monetary Policy Rate (MPR) by 100 basis points to 17.5 percent from 16.5 percent.

Speaking at the end of this year’s first meeting of the Monetary Policy Committee, MPC, held in Abuja yesterday, Governor of CBN, Mr. Godwin Emefiele, explained  that although the previous rate hikes have already started to moderate inflationary pressures,  the result was not yet good enough to hold or reduce the MPR.

His words, “We are happy that some of these policies that we introduced in the last couple of months in our attempt to rein in inflation are beginning to yield results, not just in plateauing but are beginning to drop.

“But MPC members feel that the 10 basis points drop from 21. 47% to 21.34% is just not good enough as a reason to begin to celebrate.  

“We concluded that yes inflation rate was reducing, Year-on-Year, but the other underlining figures have not given us reasons to celebrate, as such we decided to be aggressive in our tightening.”

Only N370b Stamp Duty collected

Emefiele dismissed claims that CBN was holding N89 trillion Stamp Duty fund.

He said, “It beats our imagination that those arguments can come up.   N89 trillion is so large.   The total assets of the banking industry today is about N71 or N71.5 trillion.   The total deposits of the banks is N44. 498 trillion.

“How then is it possible that Stamp duty of N89 trillion, that is twice the value of deposit of banks.   How possible is that? Total Stamp Duty collected from 2016 to date is N370.686 billion.   Out of this the Federal Inland Revenue Service (FIRS) has paid N226.462 billion to the Federation Accounts Allocation Committee (FAAC) leaving a balance of 144.234 billion in the CBN account”.