By Babajide Okeowo
After Nigeria’s Inflation rate hit a 17-year high in April, the policy-setting committee of the Central Bank of Nigeria (CBN), Wednesday raised the Monetary Policy Rate (MPR), which measures interest rate by 50 basis points to 18.50% from the previous 18 per cent.
The development is the third consecutive time the apex bank will be raising the benchmark rate this year.
At a news conference at the end of the Monetary Policy Committee (MPC) meeting, the apex bank’s governor, Governor Godwin Emefiele disclosed that the MPC thought that the continued rise in inflation albeit moderate “remained the biggest challenge confronting macroeconomic stability in Nigeria”.
The move follows a similar 50-basis-point increase in March and means the bank has now raised rates by a cumulative 700 basis points in its latest hiking cycle.
Emefiele disclosed that policy rate hikes had prevented inflation from rising by about 8 percentage points over the past year.
It would be recalled that Nigeria’s Inflation rose to 22.22% in annual terms in April from 22.04% in March.
Statistics agency data showed earlier on Wednesday that first-quarter economic growth slowed to about 2.3%, hurt by a government plan to swap old banknotes for newly designed ones that disrupted trade and payments.