In a move to tackle the surging inflation in the country, the Central Bank of Nigeria (CBN) has raised the Monetary Policy Rate (MPR) to 27.50 per cent from 27.25 per cent.
The decision was announced by the CBN governor, Yemi Cardoso, following a meeting of the Monetary Policy Committee (MPC) at the apex bank’s headquarters in Abuja on Tuesday.
“The Committee was unanimous in its agreement to raise the monetary policy rate by 25 basis points to 27.50 percent,” Cardoso said, adding that the MPC also retained the Cash Reserve Ratio (CRR) at 50% for Deposit Money Banks and 16% for Merchant Banks.
The CBN chief further stated that the MPC maintained the Liquidity Ratio (LR) at 30% and the Asymmetric Corridor at +500/-100 basis points around the MPR.
Cardoso cited the “backdrop of renewed inflationary pressures” as the key factor behind the MPC’s decision, noting that the headline food and core measures rose year-on-year in October 2024.
This is the sixth time the CBN has raised the interest rate since February 2024. In September, the bank had pushed the rate to 27.25% following a drop in the country’s inflation level in August 2024.
However, the latest data from the National Bureau of Statistics (NBS) showed that Nigeria’s inflation rate had risen to 33.88% in October 2024, up from 32.7% in September 2024. The NBS attributed this increase to higher transportation costs and food prices.
On a year-on-year basis, the headline inflation rate was 6.55 percentage points higher than the rate reported in October 2023 (27.33%).
The CBN’s decision to further hike the interest rate is a clear indication of the bank’s determination to rein in the surging inflation and stabilize the country’s economy. The move is expected to have far-reaching implications for businesses, consumers, and the overall economic climate.
