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This forms part of measures by the central bank to address current inflationary pressures.
Inflation for December 2022 hit a 22 year high of 54.1 per cent.
The policy rate is of keen interest to businesses, signals the rate at which the Central Bank will lend to commercial banks.
It also influences average lending rates on loans to individuals and businesses.
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“In the interim, the MPC sees the need to remain vigilant and moderate liquidity in the system to underpin macroeconomic adjustments taking place to drive inflation on a downward path. Under the circumstances, the Committee decided to increase the policy rate by 100 basis points to 28 percent.”
The prime rate, which is of keen interest to businesses, signals the rate at which the Central Bank will lend to commercial banks.
It also subsequently influences average lending rates on loans to individuals and businesses.