In a bold attempt to combat soaring inflation, the Central Bank of Nigeria has dramatically raised the interest rate by 25 basis points, marking the sixth increase this year.
This staggering hike now sets the benchmark rate at an unprecedented 27.50%, leaving many to wonder about the economic implications for Nigerians
The Governor of the Central Bank of Nigeria, Mr. Olayemi Cardoso, disclosed this at the end of the Monetary Policy Committee meeting in Abuja this afternoon.
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Cardoso said the MPC voted unanimously to raise the MPR by 25 basis points from 27.25% to 27.50%; and retain 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 chief also said the MPC retained the Liquidity Ratio (LR) at 30% and 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.
…in September
Recall that on September 24, CBN raised the Monetary Policy Rate, MPR, by 50 basis points from 26. 75% to 27.25%, while retaining the asymmetric corridor of +500/-100 basis points.
Cardoso, who disclosed this at the end of the 154th Monetary Policy Committee, MPC, meeting in Abuja, said the decision to further hike the rate was that of 11 members of the 12-member MPC present at the meeting.
However, small business owners described it then as unfortunate, and capable of further contracting businesses.
They added that as businesses contract, firms will downsize, leading to loss of jobs.
