CBN raises interest rate to 18.5%

Date:

May  24, 2023.

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Azonuchechi Chukwu.

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has raised the Monetary Policy Rate (MPR) to 18.5 per cent from the previous 18 percent in a bid to contain inflationary pressures.

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

The latest increase marks the third consecutive time the CBN will be raising the baseline interest rate this year.

The MPR is the benchmark rate that moderates interest rate in the financial system, and other rates used in any economy revolves around it, by raising the MPR, the CBN aims to influence borrowing costs, regulate liquidity, and encourage responsible lending practices.

Inflation rate in Nigeria last week rose to 22.22 percent amid the surge in food prices.

Mr. Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN), who announced the MPR hike to journalists on Wednesday after the MPC’s meeting at the CBN headquarters in Abuja expressed the bank’s determination to address the aggressive inflationary pressure that has persistently challenged the economy.

He pointed out that the decision to increase the rate was based on extensive research conducted by the apex bank, disclosing that the inflation situation would have been even more severe if the bank did not take proactive measures to maintain a higher interest rate.

The CBN Governor emphasised that maintaining or loosening the rate would be counterproductive, as it could further exacerbate the inflationary pressure.

Delving further into the performance of the economy, Governor Emefiele underscored the importance of addressing the country’s crude oil production levels, whose current production level stands at 1.1 million barrels per day, stressing that the figure poses a considerable risk to the economy.

Emefiele emphasised the urgent need to ramp up production to meet the country’s OPEC-allotted quota of 1.8 million barrels per day.(www.naija247news.com).

Azonuchechi Chukwu
Azonuchechi Chukwuhttps://gravatar.com/azonuchechivchukwu
Azonuchechi Chukwu - Business Journalist at Naija247news.com Azonuchechi Chukwu is a seasoned business journalist contributing to the insightful coverage of economic and financial news at Naija247news.com. With a passion for unraveling the complexities of the business world, Azonuchechi brings a wealth of expertise and dedication to his role. As a Business Journalist, Azonuchechi specializes in providing comprehensive analyses of market trends, corporate developments, and economic indicators. His in-depth reports offer Naija247news.com readers a nuanced understanding of the forces shaping the Nigerian and global business landscapes. Azonuchechi Chukwu's commitment to journalistic excellence is evident in his ability to translate complex financial information into accessible and engaging narratives. Whether exploring stock market fluctuations, corporate strategies, or economic policies, he strives to deliver content that empowers readers with valuable insights. With an educational background in business and a keen interest in the intersection of finance and technology, Azonuchechi stays at the forefront of industry dynamics. His coverage extends beyond traditional financial reporting, encompassing the dynamic realms of fintech, entrepreneurship, and sustainable business practices. Azonuchechi Chukwu's work goes beyond the surface, aiming to foster financial literacy and awareness among Naija247news.com's audience. By demystifying economic complexities and shedding light on emerging opportunities, he plays a pivotal role in keeping readers well-informed in the fast-paced world of business. As Naija247news.com's Business Journalist, Azonuchechi Chukwu continues to make meaningful contributions to the platform's mission of delivering timely, accurate, and relevant business news to its diverse audience. His dedication to journalistic integrity and his ability to navigate the intricacies of the business realm make him an invaluable asset to the Naija247news.com team.

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