The Central Bank of Nigeria on Tuesday raised the interest rate to 13% for the first time in two years. The interest rate was raised from 11.% to 13.5%. Thereafter, CBN Governor, Godwin Emefiele, announced while addressing the reporters after the Monetary Policy Committee meeting in Abuja.
Justifying the raise, Emefiele said the MPC is suspicious that there might be an aggressive accretion of inflation. To prevent the looming inflation, he said, the MPC had to increase the monetary policy rate by 150 basis points.
Meanwhile, the nation’s apex bank kept the asymmetric corridor around the MPR at +100 /-700 basis points, Cash Reserve Ratio at 27.4%, and Liquidity Ratio at 30%. “Six members voted to raise the MPR by 150 basis points, four members by 100 basis points and one member, by 50 basis points.
“Members complained about the continued uptrend of inflationary pressure in spite the gradual improvement in output growth.