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CBN announces 26.25% interest rate hike amid rising inflation

In a move aimed at addressing Nigeria’s escalating inflation crisis, the Central Bank of Nigeria (CBN) has announced a significant hike in interest rates.

The decision, made during a pivotal two-day meeting of the bank’s Monetary Policy Committee (MPC), marks the third consecutive increase in the Monetary Policy Rate (MPR).

The interest rate has surged by 150 basis points, skyrocketing from 24.75 per cent to 26.25 per cent.

This aggressive measure seems to reflect the CBN’s determination to rein in the country’s soaring inflation levels, which reached a staggering 33.69 per cent in April 2024.

Yemi Cardoso, the chairman of the MPC and Governor of the CBN, emphasized the urgency of the situation, citing the necessity to restore stability to the Nigerian economy.

Alongside the interest rate hike, the CBN has also mandated a Cash Reserve Ratio (CRR) of 45 per cent for Deposit Money Banks (DMBs).

Additionally, the Asymmetric Corridor around the MPR has been set at +100 and -300 basis points.

These measures appear to reflect the CBN’s commitment to implementing stringent monetary policies to combat inflationary pressures and safeguard the nation’s economic wellbeing.

As Nigeria grapples with the challenges posed by runaway inflation, the impact of these decisions will be closely monitored by economists, policymakers, and citizens alike.

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