For the second time in two consecutive months, the policy-setting committee of the Central Bank of Nigeria (CBN) has raised the monetary policy rate (MPR), which measures interest rate, from 13 per cent to 14 per cent to tame rising inflation.
In June, Nigeria’s inflation rate reached a five-year high at 18.60 percent.
The 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, the CBN governor, Mr. Godwin Emefiele, said the hike in interest rate would help tame rising inflation.
The development 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 per cent 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.
The chamber said the rate hike alone would not curb inflationary pressures.
It emphasised the need for the apex bank to pay attention to boosting supply and cushioning rising production costs caused by the high cost of energy and raw materials.
