CBN increases interest rate to 18.5%

The Central Bank of Nigeria, on Wednesday, raised its benchmark lending rate to 18.5 per cent, from 18 per cent, in an aggressive push to contain the nation’s inflationary pressure.

The CBN governor, Godwin Emefiele, announced this Wednesday after the bank’s Monetary Policy Committee (MPC) meeting that began Tuesday.

Mr Emefiele while addressing journalists at the end of the two-day meeting in Abuja, said the committee voted to keep the asymmetric corridor at +100 and -700 basis points around the MPR.

He also disclosed that the MPC voted to keep the Cash Reserve Ratio (CRR) at 32.5 per cent while the Liquidity Ratio was retained at 30 per cent.

“Ten members voted to raise the MPR by 15 basis points and one member by 25 basis points, and all members voted to keep all parameters in constant,” Mr Emefiele said.

The CRR is the share of a bank’s total customer deposit that must be kept with the central bank in the form of liquid cash, while the bank’s liquidity ratio is the proportion of deposits and other assets they must maintain to be able to meet short-term obligations.

In January, the MPC raised its benchmark lending rate from 16.5 per cent to 17.5 per cent in a sustained push to control inflation and ease pressure on the naira.

READ ALSO: North-central caucus demand deputy Senate president seat

Similarly, the CBN, during the last MPC in March, raised its benchmark lending rate to 18 per cent in an aggressive push to contain the nation’s inflationary pressure.

Last week, the annual inflation rate of Africa’s largest economy rose to 22.22 per cent in April from 22.04 per cent in the previous month. The National Bureau of Statistics (NBS) said the April 2023 inflation rate increased by 0.18 per cent compared to the March 2023 headline inflation rate.