CBN tackles rising inflation by raising interest rate to 14 per cent

The Monetary Policy Committee of the Central Bank of Nigeria (CBN) has raised lending benchmark (interest rate) from 13 to 14 per cent. The decision, according to the committee, aims at tackling the rising inflation in the country.

The inflation trend, as at June, reached a five-year high at 18.60 percent.

This is the second time the apex bank would adjust lending rate after initially doing so in May.

Godwin Emefiele, the CBN governor, said he and other members MPC members believed that decision would stabilize the soaring inflation.

He also said the committee was being cautious of emerging external shocks. Emefiele also said it was possible growth would decline, due to supply blockages caused by the Russia-Ukraine war and its attendant high energy prices.

He also said members are cautious of broad money supply, given the coming election, current insecurity, and the rise in price of energy. The solutions, he said, include balancing price of petroleum products and curbing insecurity. The committee, he said, expressed worry over Nigeria’s debt sustainability due to continued borrowing.

MPC key decisions
  • Raising interest rate to 14 per cent
  • Retaining the Asymmetric Corridor of +100/-700 basis points around the MPR
  • Retaining the CRR at 27.5 per cent
  • Retaining the Liquidity Ratio at 30 per cent