The Central Bank of Nigeria (CBN) has raised its key interest rate for the second time this year, in a continued effort to combat soaring inflation and a historic currency crisis. The Monetary Policy Committee (MPC) voted to increase the Monetary Policy Rate (MPR) by 200 basis points, bringing it to 24.75 percent from the previous rate of 22.75 percent.
This decision comes as Nigeria grapples with a significant rise in inflation. The latest figures from the National Bureau of Statistics show annual inflation at 31.70 percent, fueled primarily by rising food prices. The CBN hopes that raising interest rates will curb inflation by making borrowing more expensive and encouraging saving.
“The MPC is concerned about the persistent rise in inflation,” stated CBN Governor Olayemi Cardoso. “This decision is aimed at taming inflationary pressures and ensuring price stability in the Nigerian economy.”
The CBN also announced adjustments to other monetary policy tools. The Cash Reserve Ratio (CRR) for commercial banks remained unchanged at 45 percent, while the CRR for merchant banks was increased to 14 percent from 10 percent.
The effectiveness of the CBN’s latest move to control inflation remains to be seen. Nigerians are likely to be watching closely to see if these measures translate into lower prices for essential goods.
—Ezinwanne Onwuka reports for TruthNigeria from Abuja.
