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The Central Bank of Nigeria has raised its benchmark interest rate by 200 basis points from 12 per cent to 14 per cent at the end of a Monetary Policy Committee meeting on Tuesday.

Speaking to reporters in Abuja after the MPC meeting, Godwin Emefiele, Governor of the CBN, said the Committee voted to hike interest rates in order to curb inflation and encourage savings and investment.

The National Bureau of Statistics reported last week that Nigeria’s Consumer Price Index rose to 16.5 per cent in June, the highest inflation rate recorded since October 2005.

“While the economy is unlikely to have rebounded strongly in the second quarter of the year, the committee had to weigh up growth against surging consumer prices,” the CBN Governor stated.

Emefiele also said the CBN retained its cash reserve ratio at 22.5 per cent and liquidity ratio at 30 per cent in a bid to stabilize the naira.