The Central Bank of Nigeria (CBN) on Tuesday raised the Monetary Policy Rate (MPR) from 18.5 percent to 18.75 percent.
The Acting CBN Governor, Folashodun Shonubi, disclosed this at the end of the bank’s Monetary Policy Committee (MPC) meeting in Abuja.
He said: “In summary, the MPR voted to raise the policy rate by 25 basis points from 18.5 to 18.75 percent.”
Shonubi also revealed that the MPC adjusted the asymmetric corridor at +100 and -300 basis points around the monetary policy rate (MPR), which is the benchmark interest rate, from +100/-700 basis points.
The interest rate has increased from 11.5 percent in May 2022, when the CBN began to raise the MPR to 18.75 per cent.
While the CBN continues to tighten the monetary environment, the late increase in the interest rate by 25 basis points is lower compared to other months when it was raised by 50 basis points.
Although analysts had projected that the CBN under Shonubi would take a different direction compared to Godwin Emefiele’s tenure by slowing down the increase or retaining the previous rate.
The increase also followed the rise in inflation to 22.79 percent in June, according to the National Bureau of Statistics (NBS).
Newsmen noted that the increase in the interest rate would further make credit expensive for households and companies as the banks would be compelled to increase interest rate in line with the new decision of the MPC.
Meanwhile, the MPC voted to retain the CRR at 32.5 percent and the liquidity Ratio at 30 percent.