Monday, 31 January 2011
Nigeria: CBN raises benchmark rate
The MPC also raised the Cash Ratio Rate (CRR) from 1 per cent to 2 per cent, effective from 1st February, and the Liquidity Ratio (LR) by 500 basis points, from 25 per cent to 30 per cent, effective from 1st March.
CBN Governor Lamido Sanusi explained that the tightening measures to curb inflation were taken because the country's economy had underperformed despite the favourable conditions and notwithstanding recent stabilisation of price inflation.
Sanusi also seized the opportunity to reiterate his view that the payment of federal subsidies on petroleum products is unsustainable and a constraint on the development of the country's refineries.
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