The Central Bank of Nigeria (CBN) has increased the Monetary Policy Rate (MPR) to 27.50% from 27.25% in a bid to tackle rising inflation.
This decision followed a meeting of the Monetary Policy Committee (MPC) of the CBN. The MPR serves as the benchmark interest rate.
CBN Governor Yemi Cardoso announced the change in Abuja on Tuesday during the final MPC meeting of the year at the bank’s headquarters.
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Cardoso stated that the MPC unanimously voted to raise the MPR by 25 basis points, from 27.25% to 27.50%, while maintaining the Cash Reserve Ratio (CRR) at 50% for Deposit Money Banks and 16% for Merchant Banks.
“The Committee was unanimous in its agreement to raise the monetary policy rate by 25 basis points to 27.50 percent,” Cardoso said.
The CBN Governor also announced that the MPC decided to maintain the Liquidity Ratio (LR) at 30% and the Asymmetric Corridor at +500/-100 basis points around the MPR.
“The considerations of the meeting were held on the backdrop of renewed inflationary pressures as the headline food and core measures rose year on year in October 2024. Members therefore agreed unanimously to remain focused on addressing price developments,” Cardoso said.
This marks the sixth time the CBN has raised the interest rate since February 2024. In September, the bank increased the rate to 27.25% after a decline in the country’s inflation rate in August 2024.
Earlier this month, the National Bureau of Statistics (NBS) reported that the country’s inflation rate for October 2024 had risen to 33.88%, up from 32.7% in September 2024. This represented a month-on-month increase of 1.18 percentage points. The NBS, in its Consumer Price Index (CPI), attributed this rise to higher transportation costs and increased food prices.
On a year-on-year basis, the headline inflation rate was 6.55 percentage points higher than the 27.33% recorded in October 2023.
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