The Central Bank of Nigeria (CBN) has increased the interest rate by 150 basis points from 24.75 percent to 26.25 percent.
CBN announced the new rate in the wake of a two-day meeting of the bank’s Monetary Policy Committee (MPC) that agreed to increase the Monetary Policy Rate (MPR) for the third straight time.
CBN Governor Yemi Cardoso, also the MPC Chairman said on Tuesday: “The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) held its 295th meeting on the 20th and 21st of May 2024 to review recent economic and financial developments and assess risks to the outlook.”
Cardoso, however, said the Cash Reserve Ratio (CRR) of Deposit Money Banks (DMBS) was retained at 45 percent. The MPC also put the Asymmetric Corridor around the MPR at +100 and –300 basis points. It retained the liquidity ratio at 30 percent.
The CBN chief who admitted the rising inflation levels in the country said the key focus of the MPC meeting was to achieve price stability by using tools available to stop inflation.
According to Cardoso, the inflation pressure was reacting to food inflation, which he blamed on rising costs of transportation, infrastructure challenges, security challenges and exchange rate issues.
