The Central Bank of Nigeria (CBN) has announced an increase in its Monetary Policy Rate (MPR) to 27.25%. This decision was made during the 297th meeting of the Monetary Policy Committee (MPC), chaired by CBN Governor Olayemi Cardoso.
The increase, which raises the MPR by 50 basis points from the previous rate of 26.75%, marks the fifth consecutive hike this year. The CBN also adjusted the Cash Reserve Ratio (CRR) by 500 basis points to 50%, while maintaining the asymmetric corridor around the MPR at +100/-300 basis points and the liquidity ratio at 30%.
Governor Cardoso stated that the rate adjustment is a strategic move to curb inflationary pressures and stabilize the Nigerian economy. Despite recent signs of slowing inflation, the MPC deemed it necessary to continue tightening monetary policy to ensure long-term economic stability.
“The decision to raise the MPR reflects our commitment to controlling inflation and maintaining economic stability,” said Governor Cardoso. “We believe this measure will help limit excess liquidity in the economy and reduce inflationary pressures, ultimately benefiting the Nigerian populace.”
The CBN’s decision comes amid ongoing efforts to address rising inflation, which has significantly impacted household incomes and business operations across various sectors. By increasing the MPR, the central bank aims to make borrowing more expensive, thereby reducing the money supply and controlling price increases.
Economic analysts and experts are expected to provide further insights into the implications of this latest policy action. The CBN remains dedicated to monitoring economic conditions and making necessary adjustments to support Nigeria’s economic growth and stability.