The Central Bank of Nigeria (CBN) has raised its benchmark interest rate by 50 basis points to 18%, in an effort to control inflation which reduces the purchasing power of the currency and can lead to economic instability. Raising interest rates increases the cost of borrowing money for businesses and consumers, leading to decreased spending and a possible slowdown in economic growth. However, if inflation is high, the decrease in economic growth may be a necessary sacrifice to control it. Borrowers should consider paying off any outstanding debts before the interest rate rises, while savers may benefit from moving their money into accounts with higher interest rates. Ultimately, the decision to raise interest rates is a tool used by the central bank to maintain economic stability and ensure long-term growth.

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