The monetary policy committee of the Central Bank of Nigeria has voted to raise its monetary policy rate (MPR) to 18% from 17.5%, representing a 50 basis points increase.
This was announced by the governor of the central bank, Godwin Emefiele at a press briefing following the end of the second monetary policy committee meeting for the year held on Tuesday.
This is the second interest rate hike in 2023. The apex bank had in January raised the interest rate to 17.5% from 16.5%.
Emefiele while addressing journalists at the end of the meeting said the committee voted to keep the asymmetric corridor at + 100 and – 500 basis points around the monetary policy rate.
The CBN Governor stated the slight increase is to mitigate the effect of inflation and other economic issues. He also cited factors such as the planned fuel subsidy removal as the major reason why it needs to tighten.
“Whether we like it or not, subsidy removal will likely be removed before the end of this administration in May. To reduce the gap in negative real rates we will continue to tighten but more moderately,” he said.