CBN Increases Interest Rate To 18 Per Cent

CBN Increases Interest Rate To 18 Per Cent

The Central Bank of Nigeria on Tuesday raised its benchmark lending rate to 18 per cent in an aggressive push to contain the nation’s inflationary pressure.

The CBN governor, Godwin Emefiele, announced this Tuesday after the apex bank’s Monetary Policy Committee (MPC) meeting that began Monday.

Addressing journalists at the end of the two-day meeting in Abuja, Mr Emefiele said the committee voted to keep the asymmetric corridor at +100 and -500 basis points around the MPR.

He also disclosed that the MPC voted to keep the Cash Reserve Ratio (CRR) at 32.5 per cent, as well as the Liquidity Ratio at 30 per cent.

The CRR is the share of a bank’s total customer deposit that must be kept with the central bank in form of liquid cash, while the bank’s liquidity ratio is the proportion of deposits and other assets they must maintain to be able to meet short-term obligations.

In January, the MPC raised its benchmark lending rate from 16.5 per cent to 17.5 per cent in a sustained push to control inflation and ease pressure on the naira.

Amid the uncertainties being faced by Nigerians due to the scarcity of the redesigned Naira notes, the nation’s inflation rate increased to 21.91 per cent in February compared to 21.82 per cent in January.

According to Nigeria’s statistics bureau last week, the February inflation rate showed an increase of 0.09 per cent points when compared to January’s headline inflation rate.