Cost of funds to rise as benchmark rate hits 14 % – Guardian

CBN seeks speedy capital vote implementation

To mitigate inflationary trends and price volatility, the Central Bank of Nigeria (CBN) has increased interest rate benchmark from 12 to 14 per cent. The CBN Governor, Godwin Emefiele, who disclosed this described the increase as a ‘difficult choice.’

The decision was taken by the Monetary Policy Committee (MPC) of the CBN yesterday. Analysts, who expected a reduction, say the decision will lead to significant increase in cost of funds and disrupt efforts to kick-start growth.

Following successive negative growths in the last two quarters (six months) and persistent rise in prices of goods and services, government, late last week, admitted Nigeria is in recession. Nigeria’s economic data agency, the National Bureau of Statistics (NBS) confirmed that growth has entered a ‘negative territory’, hitting – 0.36 per cent in June.