The Central Bank of Nigeria (CBN) has increased the Monetary Policy Rate (MPR) to 14% from 13%.
The CBN Governor, Godwin Emefiele announced this on Tuesday during the 286th meeting of the Monetary Policy Committee.
According to him, it was the right option considering economic realities.
“The committee resolved that the most rational policy option would be to further strengthen its tightening stance in order to effectively curtail the unabated rising trend of inflation,” Emefiele said.
“Members were conscious of the fact that output growth remained fragile. However, not curtailing inflation now could erode the monetary gains achieved in improving consumer purchasing power and thus worsen the poverty level for the vulnerable populace.”
The monetary policy rate (MPR) is the main interest rate in a country or economy on which all other interest rates in that economy are based.
While the apex bank increased the MPR rate, it, however, retained other parameters.
The asymmetric corridor remains +100 and -700 basis points around the MPR, and the well as Cash Reserved Ratio (CRR) at 27 percent.
Tuesday’s rate hike marks the second time, the MPC will raise the interest rate in two months.
The MPC increased the rate from 11.5 percent to 13 percent on May 24.