The Central Bank of Nigeria (CBN) has increased the monetary policy rate (MPR) by 25 basis points to 27.5% in a bid to curb the rising inflation rate, which stood at 33.88% in October 2024.
The CBN Governor, Olayemi Cardoso, announced this decision after the 298th Monetary Policy Committee (MPC) meeting held on November 25-26, 2024. The committee unanimously agreed to raise the MPR to combat inflation and stabilize the exchange rate.
The key decisions made by the MPC include:
– *Raising the MPR* by 25 basis points to 27.5% from 27.25%.
– *Retaining the asymmetric corridor* around the MPR at +500/-100 basis points.
– *Retaining the Cash Reserve Ratio* of Deposit Money Banks at 50.00% and Merchant Banks at 16%.
– *Retaining the Liquidity Ratio* at 30.00%.
The CBN’s decision to raise the interest rate is aimed at addressing the uptrend in price development, stabilizing the exchange rate, and anchoring inflation expectations.