The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has raised the interest rate from 18 percent to 18.5percent, citing the nation’s inflationary pressure.
The development is the third consecutive time the apex bank will be increasing the monetary policy rate (MPR), which measures the interest rate.
The apex bank, in March, raised its benchmark lending rate to 18 percent in an aggressive push to tame the country’s inflationary pressure.
Godwin Emefiele, the Governor of Central Nigeria, disclosed on Wednesday during the media briefing to mark the end of a two-day MPC meeting in Abuja, that the decision was aimed to curtail the rising inflation in Nigeria.
Nigeria’s headline inflation rate increased to 22.22 per cent on a year-on-year basis in April 2023, according to the latest release by the National Bureau of Statistics (NBS).
Emefiele said that 10 members against one voted to increase the MPR, adding, the committee also voted to keep the asymmetric corridor at +100 and -700 basis points around the MPR.
“Our actions to increase the MPR rates are potent because the inflationary pressures you see today confronting us are a global phenomenon and this started in 2022.
“Tightening would reduce pent up aggregate demand which had contributed to high inflation,” Emefiele explained.
He noted that but for interventions by the apex regulator through tightening of the interest rate, the headline inflation currently at 22.22 percent would have risen to 30.48 percent.
Details later…