Nigerians may now have to bear the brunt of the recent hike in interest rate as this may affect profits.
This is coming just after the Central Bank of Nigeria increased its interest rate from 18.5 percent to 18.75.
The interest rate is considered as one of the key tools used to manage the flow of money and productivity in a country and a hike in the interest rate may make borrowing difficult and reduce the money a consumer spends.
Also, the Monetary Policy Committee (MPC) of the CBN retained the Cash Reserve Ratio (CRR) at 32.5 percent and the Liquidity Ratio (LR) at 30 percent.
The Acting Governor of the Central Bank of Nigeria (CBN), Mr. Folashodun Shonubi while addressing the press in Abuja explained that the MPC decided to hike the MPR by 25BPS in order to contain inflation and check interest rate.
Many are still concerned whether it will promote economic investment and growth.
Analysts had said that with the recent removal of fuel subsidy, the increase in energy prices, and the liberalisation of the exchange rate, inflationary pressure will no doubt persist unless the MPC considers options that will deal with the pressure aggressively.
