The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has decided to raise the benchmark interest rate, known as the Monetary Policy Rate (MPR), to 24.75%. This marks a 200 basis point increase from the previous rate of 22.75%.
This is the second time under the leadership of CBN Governor Olayemi Cardoso that the MPC has implemented such a hike, reflecting the bank’s ongoing efforts to manage inflation and stabilize the economy.
The announcement was made by Governor Olayemi Cardoso following the conclusion of the 294th MPC meeting in Abuja, which took place over two days, from March 25 to March 26, 2024. This decision comes as the CBN continues to grapple with rising inflation and fluctuations in the exchange rate, which have added pressure on the economy.
Alongside the MPR increase, the CBN also confirmed that the Cash Reserve Ratio (CRR) will remain at 45%, while the liquidity ratio is set at 30%. Additionally, the asymmetric corridor around the MPR will be adjusted to +100/-300 basis points, a move that aims to further influence market conditions.
The decision aligns with the forecasts of many economic analysts, who had anticipated that the CBN would raise interest rates to curb the rising inflationary pressures and volatility in the exchange rate. The increase in the MPR is seen as a crucial step in the CBN’s broader strategy to maintain price stability and ensure the stability of the national currency.
Details on the broader economic impact of this decision are expected to be released in the coming days.
