WED, JULY 26 2023-theGBJournal |Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) Tuesday hiked monetary policy rate by 25 basis points (bps) from 18.50% to 18.75%.
The Committee voted to retained the Cash Reserve Ratio (CRR) at 32,5%, liquidity ratio (LR) at 30.0% and adjusted the asymmetric corridor from +100/700 to +100/-300 basis points around the MPR.
The acting Governor of the apaex bank, Folashodun Shonubi, addressing newsmen after the MPC decision said ”hiking the interest rate has made a lot of difference in moderating the rate of inflation.”
He also projected the end of the volatility around the foreign exchange rate.
The major currency highlight since the last policy meeting in May was the CBN abolishing its multiple FX windows and collapsing all its various FX rates into the Investors and Exporters Window (IEW) on 14 June.
Accordingly, the gap between the parallel market and official exchange rate has narrowed significantly, with the naira depreciating significantly by 37.9% year-to-date (as of 18 July) to N742.93/USD at the Investors and Exporters Window (IEW).
However, foreign investors have remained on the sidelines, awaiting signals from the CBN to clear the existing FX backlogs and possibly push market interest rates higher.
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