RateCaptain
  • FX Rates
  • Money Market
  • Cryptocurrency
  • Commodities
  • Corporates
  • Contact Us
No Result
View All Result
Subscribe
  • FX Rates
  • Money Market
  • Cryptocurrency
  • Commodities
  • Corporates
  • Contact Us
No Result
View All Result
RateCaptain
No Result
View All Result
Home Banking

CBN Raises Interest Rate to 14% to Tame Rising Inflation

Rate Captain by Rate Captain
July 19, 2022
in Banking, Business, Economics, Money Market
Reading Time: 2 mins read
A A
0
CBN Raises Interest Rate to 14% to Tame Rising Inflation
Share on FacebookShare on TwitterShare on WhatsappShare on Telegram

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), in its 286th meeting which was held on the 18th and 19th of July, 2022, resorted to tightening the monetary policy stance of the country as the key rate in the economy was raised to 14 percent.

CBN Governor Godwin Emefiele announced this on Tuesday during the 286th meeting of the Monetary Policy Committee held in Lagos.

AlsoRead

CBN Reverts Interest Rate on All its Intervention Funds to 9% Annually

Bank of Industry Procures €1 Billion Loan to Support MSMEs

CBN Raises Minimum Interest Rate on Savings Deposits to 4.2%

The CBN had previously raised the interest rate from 11.5 percent to 13 percent in May, however, the continued rising inflation rate in the country occasioned a further interest rate hike to 14 percent this year. Furthermore, the 14 percent interest rate is the highest in 3 years as data from the CBN shows that the last time the MPR reach 14 percent was in 2019.

The CBN believes a hike in the interest rate was the right option given the rising inflationary pressure in the country. This move to curtail inflation from spiraling out of control is expected to stabilize the economy, considering the current economic realities.

While addressing reporters after the Monetary Policy Committee (MPC) meeting in Lagos, the CBN Governor, Godwin Emefiele said “the committee resolved that the most rational policy option would be to further strengthen its tightening stance to effectively curtail the unabated rising trend of inflation.”

Members of the Monetary Policy Committee 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.

Overview of the MPC’s Decision

  • MPR raised by 100 basis points from 13 percent to 14 percent;
  • The Asymmetric Corridor was retained at +100/-700 basis points around the MPR;
  • The CRR retained at 27.5 percent and;
  • Liquidity ratio of 30 percent was maintained.

The Central Bank of Nigeria (CBN) is not the only monetary regulator to tighten its monetary policy rate. Many central banks around the world have raised their rates as they seek to combat unrelenting inflationary pressure.

The World Bank, in its June 2022 Global Economic Prospect stated that “Russia’s invasion of Ukraine and its effects on commodity markets, supply chains, inflation, and financial conditions have steepened the slowdown in global growth.”

One key risk highlighted in the report is “the possibility of high global inflation accompanied by tepid growth. This could eventually result in a sharp tightening of monetary policy in advanced economies, leading to financial stress in some emerging market and developing economies.”

What you need to know

  • The monetary policy rate (MPR) is the baseline interest rate in an economy, every other interest rate used within an economy is built on it.
  • The CBN’s move in raising the interest rate is consistent with the high inflation rate in the country which hit a five-year high in June 2022. Higher interest rates reduce the rate of money expansion, making borrowing more expensive, and curtailing both consumption and investment. This will help in taming the rising inflation.

Share this:

  • Twitter
  • Facebook
Previous Post

Why Ethereum (ETH) is Up Almost 50% in 6 Days

Next Post

Naira Takes an Uptick to N424.17/$1 at the Investors and Exporters Window as Trade Closes on a Bullish Note

Related News

CBN Reverts Interest Rate on All its Intervention Funds to 9% Annually

CBN Reverts Interest Rate on All its Intervention Funds to 9% Annually

by Rate Captain
August 18, 2022
0

The Central Bank of Nigeria (CBN) has returned the interest rate on all its intervention facilities to 9 percent per...

Bank of Industry Procures €1 Billion Loan to Support MSMEs

Bank of Industry Procures €1 Billion Loan to Support MSMEs

by Rate Captain
August 16, 2022
0

The Bank of Industry, Nigeria’s leading development financial institution has successfully raised a €1 billion syndicated loan facility to provide...

CBN Raises Minimum Interest Rate on Savings Deposits to 4.2%

CBN Raises Minimum Interest Rate on Savings Deposits to 4.2%

by Rate Captain
August 16, 2022
0

The Central Bank of Nigeria (CBN) has instructed an upward adjustment of the minimum interest rate payable on local currency...

Nigeria’s Inflation Climbs to 19.6% in July 2022

Nigeria’s Inflation Climbs to 19.6% in July 2022

by Rate Captain
August 15, 2022
0

Nigeria’s Inflation rate jumps to  19.64 percent in July 2022 from the 18.60 percent recorded in the last month. This means...

Next Post
Naira Falls to N421.58/$1 at the Investors and Exporters (I&E) Window as Trading Closes on a Bearish Note 

Naira Takes an Uptick to N424.17/$1 at the Investors and Exporters Window as Trade Closes on a Bullish Note

Leave a Reply Cancel reply

Recommended

OPEC Forecasts a 0.3 mb/d Decline in Global Oil Demand Growth for the Rest of 2022 

OPEC Forecasts a 0.3 mb/d Decline in Global Oil Demand Growth for the Rest of 2022 

August 19, 2022
Dubai’s Emirates to Suspend Nigeria Flights Over  $85 Million Trapped Funds

Dubai’s Emirates to Suspend Nigeria Flights Over $85 Million Trapped Funds

August 18, 2022

Popular Story

  • Naira Falls to N429 at the Investors and Exporters (I&E) Window

    Naira Falls to N429 at the Investors and Exporters (I&E) Window

    0 shares
    Share 0 Tweet 0
  • Nigeria’s Inflation Climbs to 19.6% in July 2022

    0 shares
    Share 0 Tweet 0
  • Shiba Inu, Dogecoin Jump as Risk-On Behavior Returns to Crypto Markets

    0 shares
    Share 0 Tweet 0
  • OPEC Forecasts a 0.3 mb/d Decline in Global Oil Demand Growth for the Rest of 2022 

    0 shares
    Share 0 Tweet 0
  • Naira Falls Again To 517 Against Dollar

    0 shares
    Share 0 Tweet 0
RateCaptain

RateCaptain

We bring you the most accurate in new and market data. Check our landing page for details.

  • FX Rates
  • Money Market
  • Cryptocurrency
  • Commodities
  • Corporates
  • Contact Us

Copyright © 2022 RateCaptain - All rights reserved by RateCaptain.

No Result
View All Result
  • FX Rates
  • Money Market
  • Cryptocurrency
  • Commodities
  • Corporates
  • Contact Us

Copyright © 2022 RateCaptain - All rights reserved by RateCaptain.