CBN increases Interest Rate To 18.75%
The Central Bank of Nigeria (CBN) has raised the Monetary Policy Rate (MPR), from 18.5 percent to 18.75%.
Acting CBN Governor, Folashodun Shonubi, announced this Tuesday after the bank’s Monetary Policy Committee (MPC) meeting in Abuja.
The decision is the first since President Bola Tinubu’s assumption of office on May 29, 2023.
Nigeria’s headline inflation rose to 22.79% in June from the 22.41% recoded in May 2023 amid rising food prices and rising cost of transportation caused by the removal of subsidy on petrol.
Shonubi, while addressing journalists at the CBN headquarters in Abuja said “hiking the interest rate has made a lot of difference in moderating the rate of inflation”.
At the last Monetary Policy Committee meeting under Emefiele, the rates were increased to 18.5 per cent from 18.0 per cent.
Inflationary prices remained elevated in most countries despite broad measures to redeem the markets, Shonubi said.
According to him, the International Monetary Fund reversed global economic growth to 3 per cent from 2.8 per cent.
However, in the local market, the Acting CBN boss said, subsidy removal and unification of the exchange rate had led to an uptick in inflation.
The MPC voted to hike MPR by 25 basis points to 18.75% from 18.5%. The committee narrowed asymmetric corridor to +100/-300 from +100/-700 and retained the Cash Reserve Ratio (CRR) at 32.5%
He also said the volatility around foreign exchange rates would soon normalise.
