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Posted By Udokabestluv On July 26th, 2023

The Acting Governor of the Central Bank of Nigeria, Mr. Folashodun Shonubi announced  an increase in the benchmark interest rate (MPR) by 25 basis points to 18.75% from its initial 18.5%.

This was disclosed during Tuesday’s July 2025 MPC meeting at the CBN headquarters in Abuja.

Shonubi added that output growth recovery remains positive as economic agencies adjust to zero subsidies on the price of fuel and convergence of exchange rate, and price development.

Unification
Responding to questions after the meeting, Shonubi revealed that increasing the interest rates has made quite a lot of difference, adding that the CBN is not trying to unify exchange rates.

He said, “We have indicated and how that every time a rate increase has happened has moderated the rate of inflation,
“We agreed liquidity overhang was one of key challenges, in addition to interest rate hikes, we have come up with various ways to tighten liquidity, so that if it runs through inflation, it has impacts on the economy, not only rate change we are looking, we are looking at every tool to reduce inflation.

“We are not trying to unify the rate, we are encouraging the market to be efficient and that takes time, some of the volatility you are seeing is the market finding its level and reality of pent-up demand as current supply not sufficient, as we ease the demand we see a more efficient market that runs,

External reserves
According to data from the CBN, the gross external reserves dropped from $34.95 billion as of June 5, 2023, to $33.97 billion as of July 21, 2023, as foreign exchange demand pressure persisted with the resultant weakening of the external reserves.

The MPC expressed concerns that subsidy removal, forex rate liberalization and palliatives will have a pass-through effect on inflation and called for decisive measures by CBN to address the liquidity challenges from the development and using appropriate money policy tools.

They urged fiscal monetary policies to sustain collaboration toward addressing the inflationary pressures. They encouraged the Federal Government to explore policies to improve investor confidence and pave the way for FDI, emphasizing on areas like manufacturing, aviation, and the real sector to boost revenues.

The MPC also expressed its views that key policy mechanisms to shield the economy from global shocks are urgently required for the economy to post positive growth and recognizes CBN measures to boost liquidity, adding that the recent reforms will improve market transparency, and leverage on policies to attract

Source: https://nairametrics.com/2023/07/25/cbn-says-it-is-not-trying-to-unify-exchange-rates/