CBN raises benchmark interest rate to 18.75 per cent

The Central Bank of Nigeria’s Monetary Policy Committee on Tuesday raised the benchmark interest ratefrom 18.5 percent to 18.75 percent.

Folashodun Shonubi, acting governor of the apex bank, announced the development to journalists on Tuesday after the committee’s meeting at the CBN headquarters in Abuja

The decision to increase interest rate is a strategy to fighting inflation, which current stands at 22.79 per cent.

Shonubi said the committee members voted to hike the rate by 25 basis points to 18.75 percent, adjust the asymmetric corridor to +100 and -300 basis points around the MPR, retain the cash reserve ratio (CRR) at 32.5 percent and liquidity ratio at 30 percent.

He said the moderate rate hike is to sustain efforts at anchoring inflation expectations, narrow the negative real interest rate gap and improve investor confidence.

Shobubi also said members agreed unanimously that the previous rate hikes have been effective in moderating the rate of price increases.