CBN raises interest rate to 13.5%
Emefiele says the interest rate was raised to prevent looming inflation.
The CBN Governor, Godwin Emefiele, announced this on Tuesday, May 24, 2022, while addressing the reporters after the Monetary Policy Committee meeting in Abuja.
This is the first time the committee will raise the country’s benchmark lending rate since July 2016.
Emefiele while justifying the raise said the MPC is suspicious, adding that “there might be an aggressive accretion of inflation”.
The CBN boss maintained that the MPC had to increase the monetary policy rate by 150 basis points to prevent looming inflation.
According to the apex bank governor, six out of 11 committee members voted to raise the interest rate.
Emefiele also said the global outlook remains clouded due to uncertainties over the Russia-Ukraine war and the COVID-19 pandemic.
He said, "The sharp rise in inflation across the world as generated growing concerns among central bankers driven by rising demands and wage bills… consequently, US Fed, England and Canada have provided shift away from their policy stance.
“To reduce inflationary pressure, CBN decided to take a shift on historical stance on monetary policy rate.”
Emefiele urged the Federal Government and banks to up their efforts in supporting monetary authorities.
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