The Central Bank of Nigeria on Tuesday, implemented the first increase in its benchmark interest rate, the Monetary Policy Rate, in eight months, setting it at 22.75 percent.
Simultaneously, the Cash Reserve Ratio was raised to 45 percent. This move, noted as the highest ever Monetary Policy Committee rate, aims to absorb excess naira liquidity, according to data from the CBN.
Governor Olayemi Cardoso, who chaired the Monetary Policy Committee meeting for the first time since assuming office in September 2023, announced the decision on Tuesday.
In 2023, Nigeria’s MPC followed a distinct approach, steadily raising the MPR across four consecutive meetings, reaching a significant 18.75 percent by the year’s end.
Despite these proactive measures, other key indicators like the Cash Reserves Ratio and Liquidity Ratio remained unchanged, with the CRR holding at 32.5 percent and the Liquidity Ratio at 30.0 percent throughout the period.
