Reacting to the move by the MPC, former CBN deputy governor, Kingsley Moghalu, said in a post on X that it was a “correct” one.
By Jeffrey Agbo
Former deputy governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu, has praised the bank’s Monetary Policy Committee (MPC) for raising the Monetary Policy Rate (MPR) by 400 basis points to 22.75 per cent from 18.75 per cent.
CBN Governor, Olayemi Cardoso, who chairs the MPC, announced the committee’s decisions on Tuesday.
Cardoso said that the asymmetric corridor around the MPR was adjusted to +100 – 700 basis points from + 100 -300 basis points.
“The Cash Reserve Ratio (CRR) was increased from 32.5 per cent to 45 per cent, while the Liquidity Ratio was retained at 30 per cent.
“The committee decisions is centred around the current inflationary and exchange rate pressures, projected inflation, and rising inflation expectations.
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“Members are concerned about the persistent rise in the level of inflation and emphasised the committee’s commitment to reverse the trend as the balance of risk leans towards rising inflation.
“The committee, however, acknowledged the tradeoff between the pursuit of output growth and taming inflation but was convinced that an enduring output expansion is possible only in environment of low and stable inflation,” he said.
Reacting to the move by the MPC, Moghalu said in a post on X that it was a “correct” one.
“Correct move by @cenbank Monetary Policy Committee to dramatically hike the Monetary Policy Rate by 400 basis point to 22.5 %. The situation calls for nothing less if we are to check inflation over 12-18 months. We did the same a decade ago to bring inflation from 14% to 8%,” he wrote.
“It will hit businesses hard, but inflation is hitting harder. We must slay the inflation dragon lest it consume our economy and we head to Zimbabwe/Venezuela. The money supply MUST be reduced. Price stability must take priority before economic growth in the current situation.”