The Central Bank of Nigeria Monetary Policy Committee has increased the interest rate from 26.25% to 26.75%, a 50 basis point increase.
This was disclosed by the CBN governor, Olayemi Cardoso at the end of the apex bank’s 296th MPC meeting held in Abuja.
The MPC has been aggressive in its efforts to control inflation, raising rates by more than 500 basis points so far.
Additionally, the MPC pegged the Cash Reserve Ratio (CRR) at 14% for merchant banks and 45% for deposit money institutions. Thirty percent was the fixed liquidity ratio.
The apex bank also adjusted the asymmetric corridor around the MPR from +100 to –300 basis points around the MPR to +500 and –100 basis points around the MPR.
Commenting, Cardoso justified the rise by citing recent economic developments including inflation and the requirement to stabilize the foreign exchange market.
He also mentioned current government policies that import some staple goods like wheat, rice, and maize in an effort to reduce the rate of rising food inflation, but he cautioned that the timeline must be adhered to in order to prevent the advancements in local food production from being undermined.
The 50 basis points rise to the interest rate would be the fourth consecutive increase in by the Central Bank in 2024 and continues from similar MPR hikes in 2023.
