Borrowing to get more expensive as CBN increases interest to 17.5%, highest in 22 years

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) voted Tuesday to continue its increase in the benchmark interest rate by 100 basis points to 17.5 percent.

The CBN governor, Godwin Emefiele, disclosed this while reading the communique of the first MPC meeting of the year on Tuesday, 24 January 2023.

The two-day meeting which was attended by CBN’s 12 MPC members believes the new interest rate would curb further the accelerating rate of inflation and improve Nigeria’s exchange rate.

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Highlights of the MPC meeting included: increasing MPR by 100 basis points to 17.5 percent; while the asymmetric corridor of +100/-700 basis points around the MPR was retained.

The CBN also retained CRR at 32.5 percent; while the Liquidity Ratio was also kept at 30 percent.

The latest increase is the fifth in recent months and the highest level since 2000.

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