CBN Raises Interest Rates To 16.5%

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has raised the monetary policy rate (MPR), which measures interest rate, from 15.1 per cent to 16.5 per cent.

The increase, according to the apex bank is to tame rising inflation which hit 21.09 per cent recently.

The monetary policy rate (MPR) is the baseline interest rate in an economy, on which every other interest rate is based

Addressing the media on Tuesday in Abuja Godwin Emefiele, head of the apex bank, CBN, said it was expected that the hike in interest rate would continue to help tame rising inflation.

He disclosed that the committee also retained the cash reserve ratio (CRR) at 32.5 per cent and retained the liquidity ratio at 30 per cent

Emefiele noted that at this time of high inflation, loosening it would greatly jeopardise the gains of previous policy rate hikes.

According to him, due to all the causative factors including the Russia-Ukraine war, supply chain disruptions, the slowdown in China, rising inflation in advanced economies, and other headwinds, it had become apparent that a losing option was not desirable at this meeting.