CBN raises raises interest rate to 24.75%

The Central Bank of Nigeria has raised the monetary policy rate, known as the interest rate, by 200 basis points per cent to 24.75 per cent from 22.75 per cent in efforts to tackle rising inflation.

The CBN Governor, Olayemi Cardoso, disclosed this on Tuesday at the 294th Meeting of the Monetary Policy Committee press briefing in Abuja.

The bank retained the Cash Reserve Ratio to 45 per cent.

Higher interest rates increase the return on savings. They also make the cost of borrowing more expensive. Higher interest rates help to slow down price rises (inflation).

According to investopedia, higher interest rates tend to attract foreign investment, increasing the demand for and value of the home country’s currency.