The policy-setting committee of the Central Bank of Nigeria (CBN) on Wednesday raised the monetary policy rate (MPR), which measures interest rate, from 18 percent to 18.5 percent.
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Last week, Nigeria’s inflation rate rose to 22.22 percent amid the surge in food prices.
The monetary policy rate (MPR) is the baseline interest rate in an economy, every other interest rate used within an economy is built on it.
Godwin Emefiele, governor of the apex bank, announced the development to journalists on Wednesday after the committee’s meeting at the CBN headquarters in Abuja.
The development is the third consecutive time the apex bank will be raising the benchmark rate this year.
Emefiele said the committee members voted to hike the rate by 50 basis points to 18.5 percent, retain the asymmetric corridor at +100 and -700 basis points around the MPR, retain the cash reserve ratio (CRR) at 32.5 percent and liquidity ratio at 30 percent.
“The current trend in price development would
continue to be monitored by the bank with greater collaboration with fiscal authority to address the drivers of inflation,” Emefiele said.
The CBN boss said although the continued rise in headline inflation remained a significant problem confronting the economy, other macroeconomic variables are moving in the right direction despite observed headwinds.