The Central Bank of Nigeria has raised the monetary policy rate, or interest rate, by 400 basis points to 22.75 percent from 18.5 percent.
Olayemi Cardoso, Governor of the Central Bank of Nigeria, announced this at the 293rd Monetary Policy Committee press briefing in Abuja.
He stated that the action was intended to calm the country’s skyrocketing inflation rate, which stood at 29.90 percent in January.
The bank also increased the Cash Reserve Ratio to 45 percent from 32.5 percent.
“We expect that this will moderate in the short to medium term. We intend to work closely with other organs of government to take the fiscal side of the inflation, especially regarding insecurity”, he said.
“As far as CBN is concerned, we are moving to a very aggressive regulatory environment”, he added, speaking on the implementation of its policy.
He said the bank will continue to make the market more liquid, warning that operators who are not willing to abide by regulations will face the consequences.
The last time the MPC raised interest rates was in July.
Platinum Times reports that MPC held its first Meeting since its appointment in September with a move to tighten monetary policy measures.
Recall that the Chief Executive Officer of the Financial Derivatives Company, Bismarck Rewane, said the Central Bank Monetary Policy Committee will have no option but to tighten interest rates amid soaring inflation and economic hardship.