JUST IN: CBN raises interest rate to 14%, blames inflation, low purchasing power

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has voted unanimously to raise the Monetary Policy Rate (MPR) to 14 percent.

The CBN Governor, Godwin Emefiele, announced this on Tuesday while briefing reporters at the end of the committee’s meeting in Abuja.

According to Emefiele, the apex bank was seriously concerned about rising consumer prices and moved to take drastic action to reverse the trend while equally supporting growth recovery.

The new interest rate is targeted at curtailing the surging inflation in the country.

The apex bank raised Monetary MPR by 100 basis points to 14 percent, the second straight increase this year and the highest since January 2019.

At its last meeting in May, the CBN raised its benchmark interest rate by 150 basis points to 13 percent, the first time in six years.

But on Tuesday, it left the Cash Reserve Ratio (CRR) unchanged at 27.5 percent, Liquidity Ratio at 30 percent; and retained the asymmetric corridor of +100/-700 basis points around the MPR.

Nigeria’s inflation rose sharply to 18.6 percent in June, the highest since January 2017 as prices of both food and non -food items continued in an upward trend.

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