The Central Bank of Nigeria (CBN) has increased the benchmark interest rate by 25 basis points to 18.75 per cent. This was the major outcome of its fourth Monetary Policy Committee (MPC) meeting on Tuesday,
Folashodun Shonubi, the Acting CBN Governor, who disclosed this while reading the communiqué of the meeting, said the committee voted to adjust the asymmetric corridor at +100 and -300 basis points around the Monetary Policy Rate (MPR).
“In summary, the MPR voted to raise the policy rate by 25 basis points from 18.5 to 18.75 per cent.”
The meeting was the first MPC meeting after the suspension of Godwin Emefiele as the governor of the CBN. The CBN started its monetary policy tightening cycle in May 2022, with its benchmark interest rate rising from 11.5 per cent to 18.5 per cent in May this year.
The recent removal of fuel subsidies, the increase in petrol prices, the liberalisation of the exchange rate, and inflationary pressure have also put pressure on the MPC to look at options that will deal with this aggravated situation.
There are indications that the government is working towards reducing interest rates to attract more investment and consumer purchasing in ways that sustain the economy at a higher level.