CBN raises interest rate by 25 basis points in battle against inflation

Adebari Oguntoye
Adebari Oguntoye
Olayemi Cardoso and other CBN topshots during MPC meeting

The  Monetary Policy Committee of the Central Bank of Nigeria has raised the country’s interest rate by 25 basis points to 27.50 percent in November from 27.25 percent in September 2024.

The Governor of CBN, Olayemi Cardoso, who disclosed this during a press briefing on Tuesday after the 298th MPC meeting in Abuja, said that “the Committee was unanimous in its agreement to raise the monetary policy rate by 25 basis points to 27.50 percent,” he said.

Cardoso noted that the decision to raise the country’s MPR is to tackle inflation, which stood at 33.87 percent in October 2024.

He also announced that the Cash Reserve Ratio was retained at 50 basis points, from 45 percent to 50 percent for deposit money banks and from 14 percent to 16 percent for merchant banks.

Also, the CBN governor said the committee retains the liquidity ratio at 30 percent and the asymmetric corridor at +500/-100 basis points around the MPR.

Similarly, Cardoso stated that the committee retained all other monetary policy decisions.

The monetary policy measures the benchmark interest rate of the economy.

At its September meeting, the committee raised the MPR by 50bps to 27.25 percent, emphasising concerns over core inflation, money supply growth, fiscal deficits, and food price pressures.

Although headline inflation was trending downward at the time of the last MPC meeting, core inflation remained elevated, driven by energy costs and other structural factors.

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