The Central Bank of Nigeria (CBN) on Tuesday had decided to  retain its benchmark interest rate at 11.5 percent after the first Monetary Policy Committee (MPC) meeting of the year, whilst keeping all other monetary parameters constant.

The move is to sustain growth recovery, despite the sudden rise in inflation rate, which accelerated by 23bps last month to close the year at 15.63 percent after eight consecutive months of decline.

The MPC observed that inflation in most developed and emerging economies remain high driven by the persistent exchange rate fluctuations and supply bottlenecks.

The committee noted that the increase in the country’s inflation rate in December 2021 is attributable to increased demand during the yuletide and hence suggests that the uptick in the numbers could be a temporary development. The members also believe that inflation will moderate further going into the new year driven by the significant interventions in the agricultural sector.

Members of the MPC also voted to retain the asymmetric corridor of +100/-700 basis points around the MPR; the CRR at 27.5 per cent; the Liquidity Ratio at 30 per cent.

The MPC members believe that the existing monetary policy stance has supported the growth recovery and should be allowed to continue for a little longer for consolidation to achieve the MPC mandate of price stability that is conducive for sustainable growth.

The Committee also feels that a hold stance will enable it to carefully appraise the implications of the unfolding global development around policy tapering and normalization by advanced economies