The Central Bank of Nigeria has raised interest rates for local bank lending to 15.5%, just two months after it was pegged at 14%.
This is highest level yet. It comes as Nigeria’s inflation continues to spike – exceeding the 20% mark as at August.
The bank’s governor Godwin Emefiele said the monetary policy committee voted unanimously to raise the rate after deliberating on the impact of the widening margin between policy rate and the inflation rate.
“The committee thus agreed unanimously to raise the policy rate to narrow the interest rate gap and rein in inflation,” Mr Emefiele said in a statement.
Nigeria’s economy continues to struggle amid dwindling reserves and poor foreign exchange earnings.
Local banks are also slow in lending to businesses, insisting on stringent processes including the provision of adequate collateral.
Business owners say borrowing at high interest rates puts their businesses at risk.
Source: BBC