23rd July, 2024
By Kazeem Ugbodaga
The Monetary Policy Committee of the Central Bank of Nigeria (CBN) has jacked up the Monitoring Policy Rate (MPR) by 50bps moving interest rate to 26,75 percent.
The CBN had in May 2024 raised the interest rate to 26.25 percent and has now moved it to 26.75 percent.
The Apex bank’s Governor, Olayemi Cardoso disclosed this in Abuja at the 296th MPC meeting of the bank on Tuesday.
According to the Bank of England, higher interest rates increase the return on savings. They also make the cost of borrowing more expensive. Higher interest rates help to slow down price rises (inflation).
The rise in MPR is to slow down galloping inflation in Nigeria which moved to 34.19 percent in June 2024.
According to NBS, in June 2024, the headline inflation rate increased to 34.19% relative to the May 2024 headline inflation rate which was 33.95%.
“Looking at the movement, the June 2024 headline inflation rate showed an increase of 0.24% points when compared to the May 2024 headline inflation rate,” it said.
On a year-on-year basis, the NBS said the headline inflation rate was 11.40% points higher compared to the rate recorded in June 2023, which was 22.79%.
“This shows that the headline inflation rate (year-on-year basis) increased in the month of June 2024 when compared to the same month in the preceding year (i.e. June 2023).
