The Central Bank of Nigeria (CBN) has raised the Monetary Policy Rate (MPR) from 13 percent to 14 percent.
CBN Governor Godwin Emefiele announced this on Tuesday during the 286th meeting of the Monetary Policy Committee held in Lagos.
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.”
While the apex bank increased the MPR rate, it, however, retained other parameters.
The monetary policy rate (MPR) is the main interest rate in a country or economy and all other interest rates in that economy are based on it.
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.