CBN raises interest rate for first time in over two years to 13%

Oru Leonard

Following a unanimous vote, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has decided to increase the Monetary Policy Rate (MPR) to 13% from 11.5%

Godwin Emefiele, Governor of the Central Bank of Nigeria, made the announcement on Tuesday while briefing reporters during a meeting of the end committee at the apex bank’s headquarters in Abuja.

The policy-setting committee of the nation’s financial regulator has decided to raise the MPR, which is used to measure interest rates, for the first time in two and a half years. This will be the first time they have done so.

The rate which had been at 11.5% since September 2020, in a bid to spur recovery from the recession recorded due to the covid-19 has now been raised by the apex bank after the inflation rate rose above 16%.

The move by CBN is targeted at curbing the rising rate of inflation in the country, while still cautiously ensuring economic growth. This is also a massive reversal from CBN’s earlier stand that raising rates will not positively impact inflation.