CBN increases interest rates to 18.5%
CBN Governor Godwin Emefiele. Photo: Radio Nigeria/Archive
The Central Bank of Nigeria (CBN) has raised the monetary policy rate to 18.5% from the previous 18%.
The Monetary Policy Rate is the benchmark interest for the economy and is the rate at which the CBN lends to the deposit money banks.
The rate hike is the seventh consecutive rise since May last year.
While announcing the increase at the end of the Monetary Policy Committee meeting in Abuja, the Governor of the CBN, Godwin Emefiele said the decision was to tackle the inflationary pressure.
Mr Emefiele said the bank was constrained to keep raising the rate because of the aggressive inflationary pressure.
He said a research conducted by the bank indicates that the inflation situation would have been worse if not it’s action to keep interest rate up.
The Governor maintained that holding or loosening the rate would also be counter productive as it would fuel the pressure.
He stressed that the current level of crude oil production at 1.1m barrels per day was dangerously low for the economy adding that efforts must be made to ramp up production to 1.8m barrels per day allotted the country by OPEC.
Reporting by Biodun Dare; Editing by Oluwaseyi Ajibade
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