Interest rates are raised by CBN to 18%.

The Central Bank of Nigeria’s (CBN) policy-setting committee increased the monetary policy rate (MPR), which measures interest rates, from 17.5 percent to 18 percent.

Nigeria’s inflation rate increased to 21.91 percent last week as a result of the continuing cash shortage.

Every other interest rate employed in an economy is based on the monetary policy rate (MPR), which serves as its foundation.

During the meeting of the committee at the CBN headquarters in Abuja on Tuesday, the governor of the top bank, Godwin Emefiele, informed the media of the development.

This action marks the top bank’s second straight time hiking the benchmark rate this year.

The rate will be raised by 50 basis points to 18 percent, the asymmetrical corridor around the MPR will remain between +100 and -700 basis points, the cash reserve ratio (CRR) will remain at 32.5 percent, and the liquidity ratio will remain at 30 percent, according to Emefiele.

While inflation has continued to rise, the prior tightening action, according to him, has continued to slow the pace of price growth.

The CBN governor said the central bank’s strict micro- and macro-prudential measures have guaranteed the stability and sustainability of the banking system in response to concerns about the impact of the hawkish attitude on the banking sector.

He listed reasons for the tightening attitude of the monetary policy committee, including the expected withdrawal of the gasoline subsidy.

Whether we like it or not, subsidy elimination will probably take place before this government ends in May, according to Emefiele.

“We will tighten more, albeit more gradually, to close the gap in negative real rates.”