CBN increases interest rate to 18.5%, gives reasons 

CITIZENS COMPASS – THE Central Bank of Nigeria (CBN), on Wednesday, May 24, 2023, jacked up interest rate from 18 percent to 18.5 percent.

Godwin Emefiele, governor of the apex bank, announced this after the policy-setting committee meeting at the CBN headquarters in Abuja.

The development is the third consecutive time the apex bank will be increasing the monetary policy rate (MPR) which measures the interest rate.

Emefiele said members of the team agreed to raise the benchmark interest rate to curb inflation.

He said the committee considered a perennial scarcity of Premium Motor Spirit known as petrol, the 2023 general elections, continuous rise in energy prices, exchange rate pressure as well as continuous rise in insecurity.

According to Emefiele, the committee members noted that the naira redesign has huge moderating factors to price development on cash.

Announcing the committee’s decision, Emefiele said, “MPC was of the view that although the inflation rate moderated marginally in December, the economy remained confronted with the risk of high inflation with adverse consequences on the general standards of living.

“Committee, therefore, decided to sustain the current stance of policy at this point in time to further rein in inflation aggressively.

“MPC voted to raise the MPR to 17.5%, retaining  the asymmetric at +100/-700 basis points around the corridor.”

The increase has generated mixed reactions in the public.

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