The monetary policy rate (MPR), which measures interest rates, has been increased by the policy-setting committee of the Central Bank of Nigeria (CBN) from 18 percent to 18.5 percent.
Nigeria’s inflation rate increased to 22.22 percent last week as a result of the spike in food costs.
Every other interest rate employed in an economy is based on the monetary policy rate (MPR), which serves as its foundation.
The revelation was disclosed to the media on Wednesday following the committee meeting at the CBN headquarters in Abuja by Godwin Emefiele, governor of the federal bank.
The apex bank would increase the benchmark rate this year for the third time in a row as a result of the development.
The rate will be raised by 50 basis points to 18.5 percent, the asymmetric corridor around the MPR will remain at +100 and -700 basis points, the cash reserve ratio (CRR) will remain at 32.5 percent, and the liquidity ratio will remain at 30 percent, according to Emefiele.
Emefiele stated that the bank would keep an eye on the way prices are developing while working more closely with the fiscal authority to address the causes of inflation.
The head of the CBN stated that despite apparent hurdles, other macroeconomic metrics are going in the right direction despite the economy’s continuing struggle with rising headline inflation.