CBN raises interest rate to 18.5 % on stubborn inflation, slowing growth

The Central Bank of Nigeria (CBN) on Wednesday after the two-day last Monetary Policy Committee (MPC) meeting, under President Muhammadu Buhari’s administration raised its benchmark interest rate known as the Monetary Policy Rate (MPR), by 50 basis point to 18.5 the seventh straight time in one year.

This is in consideration of the persistent rising inflation and slowing growth. Nigeria’s inflation accelerated to 22.22 percent in April 2023, and its economic growth slowed to 2.31 percent in the first quarter of 2023, according to the National Bureau of Statistics (NBS).

Godwin Emefiele, governor of the CBN, who disclosed this after the MPC meeting in Abuja said while the continued rise in headline inflation remained a significant problem confronting the economy, other macroeconomic variables are moving in the right direction, despite observed headwinds.

The CBN commenced its series of monetary policy stance hikes in May 2022 from 11.5 percent to the current rate.

The MPC also kept unchanged the asymmetric corridor at +100/-700 basis points around the MPR, retained Cash Reserve Ratio (CRR) at 32.5 percent and liquidity ratio at 30 percent.