CBN increases benchmark interest rate to 18%

At Central Bank of Nigeria on Tuesday raised its benchmark lending rate to 18 percent in an aggressive push to contain the country’s inflationary pressures.

The Governor of the CBN, Godwin Emefiele, made the announcement this Tuesday after the meeting of the apex bank’s Monetary Policy Committee (MPC) which started on Monday.

Addressing journalists at the end of the two-day meeting in Abuja, Mr. Emefiele said the committee voted to keep the asymmetric corridors at +100 and -500 basis points around the MPR.

He also announced that the MPC voted to maintain the Cash Reserve Ratio (CRR) at 32.5 percent, as well as the Liquidity Ratio at 30 percent.

CRR is the proportion of total bank customer deposits that must be kept at the central bank in the form of liquid cash, while the bank’s liquidity ratio is the proportion of deposits and other assets that must be maintained in order to meet short-term obligations. .

In January, the MPC raised its benchmark lending rate from 16.5 percent to 17.5 percent in a sustained push to control inflation and ease pressure on the naira.

Also Read: Updated: CBN hikes benchmark interest rate to 17.5%

Amid the uncertainty faced by Nigerians due to the shortage of redesigned Naira notes, the country’s inflation rate rose to 21.91 percent in February compared to 21.82 percent in January.

According to Nigeria’s statistics bureau last week, the February inflation rate showed an increase of 0.09 percent when compared to January’s headline inflation rate.

Details later…