Nigeria:Interest Rate Increased to 17.5% by CBN

By Joshua Samuel

The benchmark interest rate will rise by 100 basis points to 17.5% following a unanimous vote by the Monetary Policy Committee of the Central Bank of Nigeria, CBN. While reading the communiqué at the conclusion of the two-day MPC meeting, the first of the year, CBN Governor Godwin Emefiele revealed this.

In spite of calls from stakeholders against the hike, the development means that the CBN will raise interest rates for a fifth time this year. The modest decline in inflation rate observed in December 2022, according to the CBN, indicated that prior hikes were starting to show results.

The CBN emphasized the need to continue tightening its fiscal policy, nevertheless.  Additionally, the asymmetrical corridor at +100/-700 basis points surrounding the MPR was kept by the CBN.

The CBN also maintained the CRR at 32.5% while maintaining the 30% liquidity ratio. The MPR was previously raised by the apex bank from 11.5 to 16.5 percent during the course of four successive rate increases in 2022.

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