The monetary policy committee (MPC) of the Central Bank of Nigeria (CBN) has increased the country’s interest rate by 25 basis points.
This increase raises interest rate to 27.5% in November from 27.25% in September 2024.
CBN governor Olayemi Cardoso announced the decision during a press briefing on Tuesday after the 298th MPC meeting in Abuja.
He said, “The Committee was unanimous in its agreement to raise the monetary policy rate by 25 basis points to 27.5%.”
Cardoso explained that the move was aimed at addressing inflation which stood at 33.87% in October 2024.
In addition, the cash reserve ratio (CRR) for deposit money banks was increased from 45% to 50%, while the CRR for merchant banks rose from 14% to 16%. The liquidity ratio was retained at 30%, and the asymmetric corridor remained at +500/-100 basis points around the MPR.
Cardoso also confirmed that other monetary policy parameters would remain unchanged.
At its September meeting, the MPC raised the MPR by 50 basis points to 27.25%, citing concerns about core inflation, money supply growth, fiscal deficits, and food price pressures. While headline inflation showed signs of decline at the time, core inflation remained high, driven by energy costs and structural factors.
