Moghalu Backs CBN’s Decision to Raise Interest Rate to 22.5%

A former Deputy Governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu, has expressed his support for the apex bank’s decision to raise the Monetary Policy Rate (MPR) by 400 basis points to 22.75% from 18.75%.

This move comes in an effort to tackle the rising inflation that has been plaguing the Nigerian economy.

Moghalu, in a statement on his Twitter handle, praised the CBN’s Monetary Policy Committee for taking this bold step to combat inflation

. He drew a comparison to a similar situation a decade ago when the CBN successfully brought inflation down from 14% to 8%.

Moghalu emphasized the importance of prioritizing price stability over economic growth in the current circumstances.

The decision to raise the interest rate was made during the recent Monetary Policy Committee meeting in Abuja.

It is worth noting that, in 2023, the Nigerian MPC had adopted a gradual approach to increasing the MPR over four consecutive meetings, with other key indices, such as the Cash Reserves Ratio (CRR) and Liquidity Ratio, remaining unchanged at 32.5% and 30.0%, respectively.

This recent move by the CBN has garnered support from experts like Moghalu, who believe that it is the right step towards addressing the inflation issue in Nigeria.

The hope is that this aggressive approach will help to stabilize the economy and steer it in the right direction.