CBN increases benchmark interest rate to 14% as inflation hits all-time high 18%

The Central Bank of Nigeria has voted to increase the benchmark interest rate (Monetary Policy Rate) to 14 per cent from 13 per cent being the second hawkish move by the apex bank in 2022 following the rising  inflation rate.

This was disclosed by the Governor of the CBN, Godwin Emefiele, while reading the communique of the first monetary policy committee meeting of the second half of the year on Tuesday in Abuja.

Persecondnews recalls that the apex bank had during its last MPC meeting increased the interest rate from 11.5% to 13.5% in May 2022 but with inflation rate still spiking above 18%, it has raised the rate further to 14% in a bid to combat the rising cost of goods and services.

The National Bureau of Statistics (NBS) announced that the inflation rate surged to 18.60 per cent in June, up from 17.71 percent in the previous month, the highest ever recorded by the country since January 2017.

The NBS pointed that the rate is 0.84 percent points higher compared to the rate recorded in June 2021, which is 17.75 percent.

In the meantime, Emefiele has accused banks of showing apathy to the use of the e-Naira by their customers.

He expressed the disappointment at the end of the Monetary Policy Committee meeting in Abuja.

According to him, the apathy by banks stemmed from their inability to make huge revenue from the e-Naira project.

He told customers of banks to approach their banks and demand that their account be on boarded to the e-naira wallet as making transaction through that channel is the cheapest any bank customers could get from the banking system.

The CBN Governor said with almost no bank charges attached to the e-Naira, banks would want to do everything possible to frustrate its acceptability.

Emefiele said the CBN is working with telecoms companies to enable them assist bank customers to load their e-Naira wallet through USSD codes.

The e-Naira, Persecondnews recalls, was launched by President Muhammadu Buhari on October 25, 2021 and has recorded more than 100,000 downloads on Google Play Store alone following the CBN’s campaign against cryptocurrencies.

While launching Nigeria’s first digital currency, Buhari noted that the currency and its underlying block-chain infrastructure can increase the country’s GDP, by $29bn in 10 years.

The President also declared that introduction of the e-Naira will enable his government send direct payments to citizens eligible for specific welfare programmes as well as foster cross-border trade.

He said that alongside digital innovations, digital currencies could foster growth through better economic activities, increase remittances, improve financial inclusion and make monetary policy more effective.