The Central Bank of Nigeria (CBN) has increased the Monetary Policy Rate (MPR) by 1.5 per cent to 15.5 per cent from 14.0 per cent.
While briefing reporters after the two-day Monetary Policy Committee (MPC) meeting in Abuja on Tuesday, Governor of the CBN, Godwin Emefiele said members of the MPC agreed to raise the rate in order to control the rising inflation rate in the country.
Emefiele said, this was the best decision to take at this critical moment to ease the rising cost of goods and services in the country.
Few weeks ago, the National Bureau of Statistics (NBS) announced that inflation in Nigeria rose by 20.52 per cent in August 2022 from 19.64 per cent in July 2022.
Emefiele added that inflation at over 20 per cent was high, and it was necessary to push the benchmark interest rate closer to it, noting that the normal thing was for the interest rate to be at par or slightly higher than inflation.
The CBN chief said as long as the inflation continues to surge, the monetary authorities would continue to do the needful, increase the MPR, to reduce the negative interest rate at the moment.
He explained that this was partly responsible for the MPC mop up of liquidity in the financial system by increasing the cash reserve ratio (CRR) of deposit money banks (DM