The Central Bank of Nigeria, CBN has raised the benchmark rate from 11.5 percent to 13%, the first rise in two and a half years.
The decision was announced a while ago at the Monetary Policy Committee meeting in Abuja.
The Governor of the CBN, Godwin Emefiele who addressed the media said the decision was unanimously adopted by all members of the Committee to primarily target inflation.
He said the inflationary trend had become a concern and needed to be tackled before the situation gets out of hand.
On concerns about the impact of higher interest rates on growth, Mr Emefiele said it was a dilemma but added that taming inflation was a greater priority that required urgent attention.
By Biodun Dare;