The Central Bank of Nigeria (CBN) has raised the Monetary Policy Rate (MPR), which measures interest rate, from 18.5 percent to 18.75%.
The apex bank said hiking the interest rate has made a lot of difference in moderating the rate of inflation.
The Acting CBN Governor, Folashodun Shonubi, in Abuja on Tuesday, July 25, 2023 after the bank’s Monetary Policy Committee (MPC) meeting.
This is the first decision of the monetary committee since President Bola Tinubu’s assumption of office on May 29, 2023.
It is also the first decision of the committee in about a decade without embattled Godwin Emefiele who was suspended as the governor of the apex bank on June 9, 2023.
Last week, Nigeria’s headline inflation rose to 22.79% in June from the 22.41% recorded in May 2023 amid soaring food prices and rising cost of transportation occasioned by the removal of subsidy on Premium Motor Spirit known as petrol.
This was according to the latest Consumer Price Index (CPI) report released by the National Bureau of Statistic (NBS). The CPI measures the rate of change in prices of goods and services.
Shonubi, who addressed the newsmen at the CBN headquarters in Abuja said “hiking the interest rate has made a lot of difference in moderating the rate of inflation”.
He also said the volatility around foreign exchange rates would soon normalise.
The CBN 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%