The Central Bank of Nigeria (CBN) has raised its benchmark interest rate, the Monetary Policy Rate (MPR) to twenty-two point seven five percent, representing four hundred basis points from the current eighteen point seven five percent.
The CBN Governor, Olayemi Cardoso disclosed this at the end of the Monetary Policy Committee (MPC) meeting held in Abuja on Tuesday, as it would be recalled that in 2023, Nigeria’s MPC implemented a strategy of gradually increasing the MPR over four consecutive meetings.
“The Cash Reserve Ratio (CRR) was increased from 32.5 percent to 45 percent, while the Liquidity Ratio was retained at 30 per cent.
“The committee decisions is centered around the current inflationary and exchange rate pressures, projected inflation, and rising inflation expectations.”
“Members are concerned about the persistent rise in the level of inflation and emphasized the committee’s commitment to reverse the trend as the balance of risk leans towards rising inflation.”
” The committee, however, acknowledged the tradeoff between the pursuit of output growth and taming inflation but was convinced that an enduring output expansion is possible only in environment of low and stable inflation,” he said.
Other important indices, such as the Cash Reserves Ratio (CRR) and Liquidity Ratio, stayed constant throughout the time despite these aggressive efforts, with the CRR remaining at thirty-two point five percent and the Liquidity Ratio at thirty percent.
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