The policy-setting committee of the Central Bank of Nigeria (CBN) has raised the Monetary Policy Rate (MPR), which measures interest rate, from 13 per cent to 14 per cent.
This is the second raise in interest this year.
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.
Addressing journalists on Tuesday after the committee’s meeting at the CBN headquarters in Abuja, Godwin Emefiele, governor of the apex bank, said the hike in interest rate would help tame rising inflation.
The apex bank’s Monetary Policy Committee took the decision on Tuesday at the 286th meeting held in Abuja.
Inflation had defied the bank’s monetary tightening objectives as it rose to 18.6 per cent in June.
The Central Bank Governor Godwin Emefiele said that MPC members believe that inflation will moderate.
Fears of inflation are threatening the global economy with the United States among the worst hit. The US govt is expected to raise rates to abate the growing prices.
Emefiele said the MPC members are cautious of emerging external shocks.
He said the broad outlook for both the local and domestic economy remains cloudy considering the economic headwinds.