The Monetary Policy Committee of the Central Bank of Nigeria has announced an increase in the monetary policy rate, which measures the benchmark interest rate, to 27.25 per cent.
Addressing newsmen at a press briefing after the committee’s fifth meeting for the year at the CBN headquarters on Tuesday September 24 in Abuja, the governor of the apex bank, Olayemi Cardoso, said the committee members unanimously decided to further tighten monetary policy.
Meanwhile, this new rate is an increase of 50 basis points from 26.75 per cent announced by the apex bank in July 2024.
The new rate reflects an 8.5 per cent increase in interest rates under the current leadership, which took office a year ago.
“The committee was unanimous in its decision to further tighten policy and thus decided as follows, one: raise the MPR to 27.25 per cent.” The CBN boss added.
However, the MPC retained the asymmetric corridor around the MPR at +500 to -100 basis points and 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 and retain the liquidity ratio at 30 per cent.
He added, “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 from 45 per cent and merchant banks by 200 basis points to 16 per cent from 14 per cent and retain the liquidity ratio at 30 per cent.”
Financial pundits had expected that the CBN would either hold or lower interest rates following two consecutive months of declining headline inflation.
The monetary policy rate is the baseline interest rate in an economy. Every other interest rate used within an economy is built on the MPR.
Details shortly…
