The Central Bank of Nigeria (CBN) through its Monetary Policy Committee has raised Nigeria’s monetary policy rate (MPR) interest rate to 18.75 per cent.
The interest rate was moved from 18.5 per cent set during Godwin Emefiele’s era as the governor of the CBN.
The new interest rate is the first interest rate decision made by the MPC after the inauguration of Lagos state’s former governor, Bola Tinubu, as the 16th President of the country on May 29, 2023.
In less than 60 days of Tinubu’s administration, the CBN had taken different monetary policy decisions, such as the naira float and reduction of the number of Bureau De Change (BDCs) operators amongst others.
CBN’s acting governor Folashodun Shonubi announced the decision of MPC on Tuesday after its meeting at the apex bank’s headquarters in Abuja.
Shonubi said the committee members voted to increase the rate by 25 basis points to 18.75 per cent, adjust the asymmetric corridor to +100 and -300 basis points around the MPR, retain the cash reserve ratio (CRR) at 32.5 per cent and liquidity ratio at 30 per cent.
He said the moderate rate hike is to sustain efforts at anchoring inflation expectations, narrow the negative real interest rate gap and improve investor confidence.
The apex bank boss also said members agreed unanimously that the previous rate hikes have been effective in moderating the rate of price increases.