CBN Raises Interest Rate To 24.75 Percent

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has raised the benchmark interest rate by 200 basis points to 24.75 percent in its continued efforts to tame inflationary pressures.

This is according to a communique by the MPC after its two-day meeting in Abuja on Tuesday.

The interest rate was increased to 22.75 percent by the Olayemi Cardoso – led CBN MPC about a month ago.

At the Tuesday meeting, the apex bank announced the retention of the Cash Reserve Ratio (CRR) of deposit money banks at 45 percent but adjusted the CRR of merchant banks from 10 percent to 14 percent. The committee also retained the liquidity ratio at 30 percent.

Cardoso said: “The considerations of the committee at this meeting focused on the current inflationary pressures and the need to anchor inflation expectations as well as ensure sustained exchange stability.”

According to him, the moves are part of efforts to combat the country’s rising inflationary rate which was pegged at 31.70 percent in February.

He noted that MPC members believe the headline inflation in the country is triggered mostly by a hike in the cost of food.

“The committee therefore was of the view that addressing food insecurity is key to containing the current inflationary pressures,” he said while commending the Federal Government’s efforts at curbing food insecurity including the distribution of palliatives”, the CBN boss said.

The next MPC meeting will be held between the 20th and 21st of May, 2024.