CBN raises interest rate to 18.5%, the 3rd consecutive time this year

The policy-setting committee of the Central Bank of Nigeria (CBN) has raised the monetary policy rate (MPR), which measures interest rate, from 18 percent to 18.5 percent.

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.

The development is the third consecutive time the apex bank will be raising the benchmark rate this year.

Godwin Emefiele, the CBN governor said the committee voted to keep the asymmetric corridor at +100 and -700 basis points around the MPR.

“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,” he said.

Analysts in the country had predicted the CBN and the MPC might raise the lending rates at the end of the Monetary Policy Committee.

Justifying the rising inflation rate, the MPC blamed the high energy cost and challenges around the supply chain, among others, which are beyond the reach of the CBN.