Nigeria’s central bank raises interest rates to 12%

The Monetary Policy Committee (MPC) of Nigeria’s central bank has raised the Monetary Policy Rate (MPR) by one percentage point to 12 percent.

At its last meeting in January, the MPC retained the MPR at 11 percent, the cash reserve requirement at 20 percent and the liquidity ratio at 30 percent. However, a lot has happened since the last meeting, the most consequential being a spike in inflation rate to 11.4 percent from 9.6 percent a month earlier.

The MPC’s decision came following a 2-day meeting which started on Monday in Abuja, Nigeria’s capital city. The committee also raised CRR to 22.5 percent but retained liquidity ratio at 30 percent.

The central bank’s decision is against the expectation of the 14 economists surveyed by Bloomberg who all expected the interest rate to be maintained at 11 percent. Mark Bohlund, Sub-Saharan Africa and Middle East Economist, Bloomberg Intelligence, in an interview with The Nerve Africa also predicted that the interest rate will not be changed.