The Central Bank of Nigeria (CBN) has taken decisive action to tackle the escalating rate of inflation by raising the Monetary Policy Rate (MPR) from 18.5 percent to 18.75%.
Amidst soaring food prices and the removal of subsidy on Premium Motor Spirit (petrol), the nation’s headline inflation surged to 22.79% in June, up from 22.41% in May 2023, as revealed by the latest Consumer Price Index (CPI) report published by the National Bureau of Statistics (NBS).
Acting CBN Governor, Folashodun Shonubi, made the announcement during the bank’s Monetary Policy Committee (MPC) meeting held in Abuja on Tuesday.
Notably, this decision marks the first move by the MPC since President Bola Tinubu assumed office on May 29, 2023. Furthermore, it is the first decision made by the committee in over a decade without the presence of Godwin Emefiele, who was suspended as the governor of the apex bank on June 9, 2023.
Addressing the press at the CBN headquarters, Shonubi emphasized the effectiveness of hiking the interest rate in moderating inflation. He stated, “Hiking the interest rate has made a significant impact in curbing the inflation rate.”
The CBN MPC unanimously voted to increase the MPR by 25 basis points to 18.75% and narrowed the asymmetric corridor to +100/-300. They maintained the Cash Reserve Ratio (CRR) at 32.5%, ensuring stability within the financial system.
Shonubi expressed optimism that the volatility surrounding foreign exchange rates would soon normalize, providing a more stable environment for economic activities.
The CBN’s decision to raise the interest rate underscores its resolute commitment to combatting inflation and safeguarding the Nigerian economy. This move aims to promote price stability, enhance investor