19th July, 2022
The Central Bank of Nigeria (CBN) has jacked interest rate to 14 percent, showing an increase of one percent.
This is the second time the apex bank is hiking the interest rate in two months.
In May the CBN Raised the interest rate to 13 percent.
The bank’s Monetary Policy Committee (MPC) raised the interest rate on Tuesday, according to CBN’s governor, Godwin Emefiele.
The CBN governor at a news conference said the bank raised the interest rate to help address the nation’s rising inflation.
When interest rates are rising, both businesses and consumers will cut back on spending. This will cause earnings to fall and stock prices to drop. A rising interest rate will halt borrowing.
Nigeria’s current inflation for the month of June stands at 18.60 percent on a year-on-year basis. This is 0.84 percent points higher compared to the rate recorded in June 2021, which is 17.75 percent.
According to the National Bureau of Statistics, tThis means that the headline inflation rate increased in the month of June 2022 when compared to the same month in the previous year (i.e., June 2021).
Increases were recorded in all COICOP divisions that yielded the Headline index. On a month-on-month basis, the Headline inflation rate increased to 1.82 percent in June 2022, this is 0.03 percent higher than the rate recorded in May 2022 (1.78 percent).
The percentage change in the average composite CPI for the twelve months period ending June 2022 over the average of the CPI for the previous twelve months period is 16.54 percent, showing a 0.62 percent increase compared to 15.93 percent recorded in June 2021.