CBN Takes Interest Rate To 27.25%, Tightens Monetary Policy
BY COBHAM NSA – The Central Bank of Nigeria (CBN) has again voted to hike its Monetary Policy Rate (MPR) by 50 basis points from 26.75 percent to 27.25 percent
Rising from the 297th Monetary Policy Committee (MPC) meeting held on September 23rd and 24th to review recent economic and financial developments, the apex Bank said; “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”.
This is the fifth time within this year that the apex bank has raised MPR, which serves as the baseline interest rate in an economy and every other interest rate used within an economy.
Addressing journalists after the Committee’s meeting at the CBN headquarters on Tuesday in Abuja, the apex Bank Governor, Olayemi Cardoso, said the committee members unanimously decided to further tighten monetary policy following their assessment of the economic outlook for the year.
This new rate reflects an 8.5 percent increase in interest rates under the current leadership since it came into office about a year ago.
According to Cardoso, the MPC however retained the asymmetric corridor around the MPR at +500 to -100 basis points and raised the Cash Reserve Ratio of deposit money banks by 500 basis points to 50 per cent and merchant banks by 200 basis points to 16 per cent from 14 per cent and retain the liquidity ratio at 30 per cent.
He further said; “The MPC decided to retain the asymmetric corridor around the MPR at plus 500 to minus 100 basis points. It also raised the Cash Reserve Ratio of deposit Money banks by 500 basis points to 50 per cent from 45 per cent and merchant banks by 200 basis points to 16 per cent from 14 per cent and retain the liquidity ratio at 30 per cent.”
There was heightened expectation by financial experts that the apex Bank would either maintained or lower 26.75 percent interest rates announced in July 2024.
This is against the backdrop of two consecutive months of declining headline inflation in the country.
More coming soon…
