As a key measure to tighten money supply in response to the sharp increase in inflation in February, the Central Bank of Nigeria (CBN) Tuesday raised its Monetary Policy Rate (MPR) to 12 percent from 11 percent.
CBN also increased the portion of customers’ deposits that banks must keep as cash, known as the Cash reserve ratio, to 22.5 percent from 20 percent, while it retained the liquidity ratio (LR) at 30 percent.
,Godwin Emefiele, CBN Governor announced these decisions at the end of the Monetary Policy Committee (MPC) meeting. .
Emefiele said that the decision to tighten money supply was because the balance of risk was against inflation.
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