CBN raises interest rate to 14% to tame surging inflation

July 19, 2022
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Central Bank of Nigeria
Central Bank of Nigeria
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July 19, (THEWILL) – The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has raised the monetary policy rate (MPR) from 13 percent to 14 percent.

The monetary policy rate (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, CBN Governor, Godwin Emefiele, said the hike in interest rate would help tame rising inflation.

This is the second hawkish move by the apex bank in 2022 following the rising rate of inflation.

This comes on the heels of the MPC’s recent retreat in Lagos, where Emefiele had hinted on the key considerations that would influence the rate-setting body’s decision to boost the economy and tame inflation.

In tune with the strategic focus of the apex bank, Emefiele also disclosed that the MPC will chart a new course for an improved monetary policy and CBN that will provide direction for monetary policy in Nigeria..

The retreat had “Monetary Policy Implementation in a Digitally-Evolving Developing Economy’’, as its theme.

Mr Emefiele said that technology and innovation was playing a major role in output growth and economic development in Nigeria, hence the need to explore new ways of adapting monetary policy tools to improve the contribution of technology and innovations to the growth equation.

He said that monetary policy had been severely challenged, as its policy space narrowed significantly, in some cases, paradoxically and necessitating the need to rethink monetary policy in the context of emerging challenges and economic transformation.

Nigeria’s inflation rate increased to 18.60 percent on a year-on-year basis last month (June 2022) – the highest in five years. This is 0.84 percent points higher compared to the rate recorded in June 2021, which is 17.75 percent.

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