-What this means for you
The Monetary Policy Rate (MPR) of Nigeria has been raised by the Central Bank of Nigeria (CBN) to 18% from 17.5% as of 21st March 2023.
The announcement was made by Governor Godwin Emefiele, following a meeting of the Monetary Policy Committee of the CBN.
Governor Emefiele revealed that the various rate hikes in the past have had a positive effect on inflation rates.
He further added that future rate hikes would not have any adverse effects on the banking industry in Nigeria.
Conversely, loosening the interest rates could reverse the gains that the country has achieved so far.
In a unanimous decision, 10 members of the MPC voted to raise the MPR by 50 basis points, thus leading to the interest rate hike to 18%.
This decision by the CBN is expected to affect the economy in the short run, with an expected drop in borrowing and spending.
It is essential to note that the move by the CBN is part of a broader attempt to combat inflation, which has been on the rise in recent times.
The CBN hopes that the move will help to stabilize the economy and encourage long-term investments.
The increase in interest rates by the CBN is a step towards achieving a more stable economic environment, which will ultimately benefit the country in the long run.