The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has increased the Monetary Policy Rate (MPR) by 25 basis points, raising it to 27.50% from 27.25% in September 2024. The announcement was made by CBN Governor Olayemi Cardoso during a press briefing on Tuesday following the 298th MPC meeting in Abuja.
Cardoso stated that the committee unanimously agreed to raise the monetary policy rate by 25 basis points to 27.50% as part of efforts to curb inflation, which stood at 33.87% in October 2024. The MPC also retained the Cash Reserve Ratio (CRR) at 50 basis points, with deposit money banks maintaining a CRR of 50% and merchant banks at 16%. Additionally, the liquidity ratio was held at 30%, and the asymmetric corridor around the MPR was retained at +500/-100 basis points.
This marks the second adjustment to the MPR in recent months. At its September meeting, the MPC raised the MPR by 50 basis points to 27.25%, citing concerns over core inflation, money supply growth, fiscal deficits, and rising food prices. Despite a slight decline in headline inflation, core inflation—driven by energy costs and other structural factors—remains elevated, necessitating further action.
The MPR, serving as the benchmark interest rate for the economy, is a critical tool used by the CBN to manage inflation and influence monetary policy outcomes. The latest hike reflects the bank’s commitment to addressing inflationary pressures and stabilizing Nigeria’s economic environment.
