The Central Bank of Nigeria has announced that the increase of interest rates in advanced economies will not affect the Nigerian economy as the funds released in these economies through stimuluses did not flow into Nigeria.
This is according to the CBN governor, Godwin Emefiele, while addressing members of the press after the MPC communique reading. He explained that the MPC has voted to keep interest rates low in order to support Nigeria’s economy’s growth.
He explained that the advanced economies are only raising interest rates because they are facing significant uptick in inflationary pressure, whilst Nigeria has been witnessing moderations except for December 2021, which he said is temporary.
“Flows from the advanced economy did not move into the Nigerian economy, fortunately during the period of stimulus release by world central banks, we witnessed a reversal in our portfolio investments as they feel our yields are not as desirable,” Emefiele said.
Recall that the U.S. Federal Reserve said it will be adopting a tightening monetary policy at a much faster pace than anticipated to tame persistently high inflation.
The central bank voted to keep the MPR at 11.5%, leaving the asymmetric corridor of +100/-700 basis points around the MPR, retained CRR at 27.5%, while liquidity ratio was left at 30%.