The policy-setting committee of the Central Bank of Nigeria (CBN) has raised the monetary policy rate (MPR), which measures interest rate, from 13 percent to 14 percent to tame rising inflation.
In June, Nigeria’s headline inflation rate reached a five-year high at 18.60 percent.
The monetary policy rate (MPR) is the baseline interest rate in an economy, every other interest rate used within an economy is built on it.
Addressing journalists on Tuesday after the committee’s meeting at the CBN headquarters in Abuja, Godwin Emefiele, governor of the Central Bank of Nigeria, said the hike in interest rate would help in taming the rising inflation.
The Interest Rate Hike is the second consecutive time the apex bank will be raising the benchmark rate this year.
At its last meeting in May, the committee also raised MPR from 11.5 percent to 13 per cent over the surge in fuel and food costs.
Emefiele said the committee members voted to hike the rate by 100 basis points and retained the asymmetric corridor at +100 and -700 basis points around the MPR and liquidity ratio at 30 percent.
During its third quarterly media briefing in 2022 on the state of the Nigerian economy, the Lagos Chamber of Commerce and Industry (LCCI) advised CBN to roll out more friendly supply-side policies to boost productive sectors.
Soaring Inflation in the price of basic products for the average Nigerina has been the headline grabbing Economic Issue over the course of 2022 with prices of Goods and Services in some instances rising by over a 100 percent.
This development had prompted many observers to call on the Central Bank of Nigeria and the Federal Government of Nigeria to do more to ensure more Nigerians do not suffer more hardship from the rising inflation following years of unimpressive Economic performance.
Others have also called on the Governmento engage relevant stakeholders to ensure the rise is curbed.
