The Central Bank of Nigeria (CBN) has increased its benchmark interest rate, the Monetary Policy Rate (MPR), to 27.25% from 26.75%. This is the fifth rate hike this year, reflecting the bank’s aggressive stance against inflation.
The decision was announced by CBN Governor Olayemi Cardoso following the Monetary Policy Committee’s meeting in Abuja. The 50 basis point increase brings the total rate hike under the current leadership to 8.5%.
In addition to the rate hike, the CBN also raised the Cash Reserve Ratio (CRR) for deposit money banks to 50% and for merchant banks to 16%. The asymmetric corridor around the MPR remained unchanged at +500 to -100 basis points, while the liquidity ratio was maintained at 30%.
Cardoso said: “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 retained the liquidity ratio at 30 per cent.”
