The Central Bank of Nigeria’s Monetary Policy Committee has raised the Monetary Policy Rate to 27.25%, marking a 50-basis-point increase from the previous rate of 26.75% set in July 2024.
According to The PUNCH, this new rate reflects an 8.5% hike in interest rates since the current leadership took office a year ago.
The decision, announced by CBN Governor Olayemi Cardoso during a press briefing at the bank’s headquarters in Abuja, came after the committee’s fifth meeting of the year.
Cardoso emphasized that the committee members were unanimous in their decision to further tighten monetary policy.
“The committee was unanimous in its decision to further tighten policy and thus decided as follows: raise the MPR to 27.25 per cent,” Cardoso said.
Along with the interest rate adjustment, the MPC retained the asymmetric corridor around the MPR at +500 to -100 basis points.
Additionally, it increased the Cash Reserve Ratio for deposit money banks by 500 basis points to 50%, and for merchant banks by 200 basis points to 16%, while maintaining the liquidity ratio at 30%.
Cardoso elaborated, “The MPC decided to retain the asymmetric corridor around the MPR at plus 500 to minus 100 basis points. It also raised the Cash Reserve Ratio of deposit money banks by 500 basis points to 50 per cent and merchant banks by 200 basis points to 16 per cent from 14 per cent.”
Financial analysts had speculated that the CBN might keep rates steady or lower them, given the recent decline in headline inflation over the past two months.
However, the latest hike reflects the central bank’s continued efforts to curb inflation and stabilize the economy.
