CBN Increases Interest Rate To 18.75% In Bid To Tackle Inflation

The Central Bank of Nigeria (CBN) took decisive action on Tuesday, July 25, during its fourth Monetary Policy Meeting for 2023, raising the Monetary Policy Rate (MPR) from 18.5 percent to 18.75 per cent. The move comes as part of the CBN’s efforts to address the growing concerns of inflation and stabilize interest rates in the country.

In addition to the MPR hike, the Monetary Policy Committee (MPC) of the CBN chose to maintain the Cash Reserve Ratio (CRR) at 32.5 percent and the Liquidity Ratio (LR) at 30 percent. These measures are expected to help bolster the nation’s economic resilience amidst mounting inflationary pressures.

Addressing the press in Abuja on Tuesday, the Acting Governor of the Central Bank of Nigeria, Mr. Folashodun Shonubi, elaborated on the decision to increase the MPR by 25 basis points (BPS). He emphasized that the move was taken to contain the rising inflation rate and to control interest rates, thereby promoting stability in the financial markets.

The CBN’s proactive stance in adjusting the MPR is seen as a crucial step in steering the Nigerian economy through the current challenges and uncertainties. The apex bank remains committed to employing all necessary monetary tools to foster sustainable growth and mitigate the impact of inflation on consumers and businesses.

Analysts are closely monitoring the impact of these policy changes, as they believe it will have significant implications for lending rates, investment decisions, and overall economic activities in the country. As the situation unfolds, businesses and individuals alike are advised to remain vigilant and adapt to the evolving financial landscape. (CONTINUE READING HERE)