Inflation for December 2022 reached a 22-year high of 54.1 percent.
The policy rate is attractive to businesses, marking the rate at which the Central Bank will lend to commercial banks.
This also affects the average lending rate for loans to individuals and businesses.
“In the interim, the MPC sees the need to maintain vigilance and moderate liquidity in the system to support macroeconomic adjustments that are being made to push inflation on the downward path. In these circumstances, the Committee decided to increase the policy rate by 100 basis points to 28 percent.
The prime rate, which attracts business interest, marks the rate at which the Central Bank will lend to commercial banks.
It also then affects the average level of debt in loans for individuals and businesses.