Nigerian Central Bank Hikes Key Interest Rate Just Days After Naira Plunges to New Low

Following the latest meeting of the monetary policy committee, the Central Bank of Nigeria says it has hiked the monetary policy rate to 15.5%. By increasing the key interest rate by 150 basis points, the central bank hopes to “narrow the negative real interest rate gap and rein in inflation.” The rate increase came just days after the naira’s parallel exchange rate against the dollar plunged to a new low.

Narrowing the Negative Real Interest Rate Gap

According to the Central Bank of Nigeria (CBN), members of the bank’s monetary policy committee (MPC) have voted “unanimously to raise the policy rate to narrow the negative real interest rate gap and rein in inflation.” Following the vote, Nigeria’s key interest rate — the monetary policy rate (MPR) — now stands at 15.5%, up from 14%.

In a statement, the CBN said the decision to increase MPR by 150 basis points was made because members of the MPC felt that any attempt to loosen the policy rate would be detrimental.

At this [MPC] meeting, the option to loosen the policy rate was not considered as this would be gravely detrimental to reining-in inflation … The Committee thus voted unanimously to raise the Monetary Policy Rate (MPR) and the Cash Reserve Requirement (CRR). Ten members voted to raise the MPR by 150 basis points, one member by 100 basis points, and another member by 50 basis points.

Nigeria’s inflation rate, which has now grown by 280 basis points in just four months, stood at 20.52% in August 2022. To stop it from growing further, the MPC said it is necessary for the CBN to ensure that “significant focus [is] be given to taming inflation.”

Meanwhile, the bank’s decision to hike the MPR came just days after the Nigerian currency’s exchange rate against the U.S. dollar plunged to a new all-time low. According to a Bloomberg report, the naira’s parallel market exchange rate had dropped from 715 naira for every dollar to 720 naira per dollar. On the formal market, one U.S. dollar was buying just under 440 naira.

Following the naira’s latest significant depreciation, the spread between the currency’s official and parallel market exchange rate has now widened to over 280 naira.

Register your email here to get a weekly update on African news sent to your inbox:

What are your thoughts on this story? Let us know what you think in the comments section below.



from Bitcoin News https://ift.tt/9RCulwd

Comments

Post a Comment

Popular posts from this blog

13 Years Ago Today, Satoshi Nakamoto Published the First Forum Post Introducing Bitcoin

Image
13 years ago today, the creator of the Bitcoin network, Satoshi Nakamoto published the inventor’s first forum post on the P2P Foundation website. The forum post called “Bitcoin open source implementation of P2P currency” introduced the e-cash system to the members of the advocacy and research forum focused on peer-to-peer dynamics in society. The First of 3 February 2009 Forum Posts Introducing Bitcoin There was three occasions in February 2009 when Satoshi Nakamoto introduced the inventor’s Bitcoin white paper and open source codebase to the P2P Foundation forum members. The occasion on February 11, 2009, was the first time the creator of Bitcoin publicly announced the project using the P2P Foundation forum. Prior to these instances during the month of February, Nakamoto leveraged the email system tethered to the cryptography mailing list hosted on metzdowd.com . The introductory forum post is quite fascinating, and the inventor also leaves a link to the software’s first version
Read more

ATPBot Launches the Easiest Automated Crypto Trading Bot for Investors

Image
PRESS RELEASE. ATPBot, the renowned leader in quantitative trading strategy development, proudly introduces its revolutionary auto trading bot to the cryptocurrency market. This cutting-edge bot boasts a user-friendly interface and a proven set of features, designed to cater to both novice and seasoned traders alike. ATPBot leverages the power of artificial intelligence to create and implement winning quantitative trading strategies. Supported by rigorously tested and proven methods, the bot offers meticulous backtest data, instilling investors with confidence in their trading endeavors. The auto trading bot simplifies the complex trading landscape into just three steps: Connect, Select, Run! By connecting to a crypto exchange API, users can effortlessly choose a strategy and set the investment amount. With a single click of the “Run” button, the AI bot takes over, tirelessly working 24/7. ATPBot’s brilliance lies in its constant strategy adjustments, fueled by extensive histori
Read more

Jupiter’s JUP Token Makes a Grand Entry With $700M Airdrop on Solana Blockchain

Image
Jupiter successfully launched its JUP token. The airdrop, one of the largest in crypto history, distributed an astounding $700 million worth of JUP tokens to almost a million wallet holders. Jupiter’s JUP Token Airdrop Distributes to Nearly a Million Users The cryptocurrency world witnessed one of the largest token airdrops in its history on Jan. 31, as Jupiter, a Solana-based decentralized trading aggregator, launched its native token, JUP. The event distributed approximately $700 million worth of JUP tokens to nearly a million wallets. Jupiter’s founder, known pseudonymously as weremeow on X, announced the launch details in a forum post, revealing that the initial circulating supply of JUP would be 1.35 billion tokens, a reduction from the previously projected 1.7 billion. This adjustment brought the total supply to 10 billion JUP tokens, split evenly between team and community wallets. The airdrop constituted 10% of the total supply, amounting to 1 billion JUP. The distributi
Read more