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As inflation continues to rise unabated across several advanced economies, the Central Bank of Nigeria has reversed its interest rate on intervention facilities from five per cent to nine per cent.
This is according to a circular released on Wednesday August 17, signed by the director, financial policy and regulation department Chibuzo Efobi.
“All intervention facilities granted prior to July 20, 2022 shall be at nine per cent per annum effective September 1, 2022,” the circular read.
The Bank had introduced several intervention schemes targeted at stimulating productivity in agriculture, manufacturing industries, energy infrastructure, healthcare, aviation, exports and Micro Small and Medium Enterprises (MSMEs).
Earlier in March, CBN announced it will extend its five per cent interest rate on its intervention loans introduced to cushion the effect of COVID-19 on the economy, for another one year in view of the “promising trajectory” it claimed to have established in economic growth and job creation.
However, the consumer price index (CPI), which measures the rate of change in prices of goods and services, showed that Nigeria’s inflation rate rose from 18.60 per cent in June to 19.64 per cent in July, the highest in 17 years, the National Bureau of Statistics (NBS) said on Monday.
The highest increases were recorded in prices of gas, liquid fuel, solid fuel, passenger transport by road and air, garments, cleaning, repair and hire of clothing.
Food inflation also rose to 22.02 per cent in July from 20.60 per cent in June, as a result of increases in prices of bread and cereals, food products, potatoes, yam and other tubers, meat, fish, oil, and fat.
It would be recalled that in May, the CBN tightened its monetary policy stance known as the Monetary Policy Rate (MPR) to contain rising inflation.