Nigeria’s central bank raises interest rate to 12 percent

22 Mar 2016
Chibuike Oguh


The CBN raised interest rates in order to ease inflationary pressures.

Governor, Central Bank of Nigeria, Godwin Emefiele

The Central Bank of Nigeria (CBN) has raised its benchmark interest rate from 11 percent to 12 percent at the end of its Monetary Policy Committee meeting on Tuesday.

Speaking during a press briefing in Abuja, Godwin Emefiele, Governor of the CBN, said the MPC decided to raise interest rates in order to ease the inflationary pressures caused by excess liquidity in the banking system.

“The Committee noted the lingering inflationary pressures caused by excess liquidity though it is more structural in nature,” Emefiele said.

Emefiele said the Monetary Policy Committee of the CBN also raised the Cash Reserve Ratio (CRR) to 22.5 percent from 20 percent. Liquidity Ratio, however, was kept at 30 percent.

Nigeria’s inflation reached double digits in February for the first time in over three years, rising to 11.4 percent from 9.6 percent recorded in the previous month. The last time Nigeria recorded double digit inflation was in December 2012.

Nigeria’s inflation had risen steadily since November 2014. The inflation rate crossed the CBN’s upper limit of 9 percent in June last year.

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