CBN Hikes Interest Rates to 27.50 Per Cent, Sixth Time in 9 Months

The Central Bank of Nigeria (CBN) has raised the Monetary Policy Rate (MPR) to 27.50 per cent from 27.25 per cent, marking the sixth interest rate hike in the last nine months. This decision followed Tuesday’s Monetary Policy Committee (MPC) meeting at the CBN headquarters in Abuja. 

Announcing the decision, CBN Governor Yemi Cardoso said the committee voted unanimously to increase the MPR by 25 basis points while retaining other vital parameters, including the Cash Reserve Ratio (CRR) at 50 per cent for Deposit Money Banks, 16 per cent for Merchant Banks, the Liquidity Ratio (LR) at 30 per cent, and the Asymmetric Corridor at +500/-100 basis points around the MPR.

The hike comes amid persistent inflationary challenges, with Nigeria grappling with rising prices and economic headwinds exacerbated by global market dynamics.

The CBN has been on an aggressive monetary tightening path since the start of 2023, raising rates six times to curb inflation, which remains above desired levels.

The last rate increase in September shows an 8.5% increase in interest rates under the current leadership since it took office over a year ago.

The committee was unanimous in its decision to further tighten policy and thus decided as follows, one: raise the MPR to 27.25 per cent, Cardoso said in September.

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