The Monetary Policy Committee of the Central Bank of Nigeria has again, raised the official benchmark interest rate known as the Monetary Policy Rate by 50 basis points, implying that the interest rate has been raised to 18.5 percent.
Godwin Emefiele, governor, Central Bank of Nigeria, made the announcement today, noting that the new decision was to mark the end of a 2-day MPC meeting, said 10 members against one voted to increase the MPR, while retaining other rates around the official rates.
“Tightening would reduce pent up aggregate demand which had contributed to high inflation,” Emefiele said.
MPC has been increasing rates since May 2022, a reason it attributed to Nigeria’s constant high in demand-pull inflation. Emefiele said except for interventions by the apex bank through tightening of the interest rate, the headline inflation currently at 22.22 percent would have increased to 30.48 percent.
Emefiele said MPC tightening of the MPR would help in abating security challenges and increasing exchange rate pressures.
MPC explained that headline inflation remains because of the scarcity of the premium motor spirit, high price of energy products outside the control of the monetary authorities.