CBN raises interest rate to 18% on rising inflation, fragile growth

The Central Bank of Nigeria (CBN) on Tuesday after the second two-day Monetary Policy Committee (MPC) in the year, raised its benchmark interest rate known as the Monetary Policy Rate (MPR), by 50 basis point to 18%, the sixth straight time.

Godwin Emefiele, governor of the CBN, who disclosed this after the MPC meeting in Abuja said a moderate tightening may slow the rate of deceleration in inflation without necessarily hurting output.

Nigeria’s inflation rate accelerated to 21.91 percent in February 2023 from 21.82 in January, fueled essentially by cost of energy, food and Naira scarcity, according to the National Bureau of Statistics (NBS).

Data from the NBS showed that Nigeria’s annual Gross Domestic Product (GDP) growth rate slowed to 3.10 per cent in 2022, compared to 3.40 per cent in 2021.

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