The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), under the leadership of Olayemi Cardoso, announced a significant increase in the main interest rate by 400 basis points to 22.75 percent on Tuesday.
The rate hike, aimed at curbing inflation and stabilizing the economy, will have implications for investors, borrowers, and savers across various sectors.The monetary policy rate (MPR), which determines the rate at which the CBN lends to commercial banks, serves as a benchmark rate for lending activities within the banking sector.
According to data from the National Bureau of Statistics, headline inflation surged to 29.9 percent in January, marking a significant increase from the previous month’s figure of 28.92 percent
.Analysts at BancTrust & CO highlighted the MPC’s decision as a strategic move towards inflation targeting and essential liquidity tightening measures to mitigate the depreciation of the naira. The rate hike signals the CBN’s commitment to implementing measures that promote price stability and support sustainable economic growth amid prevailing macroeconomic challenges.
Source: Business Day