Kehinde Fajobi
The Central Bank of Nigeria (CBN) has increased the Monetary Policy Rate (MPR) from 27.25% to 27.5%, aiming to curb rising inflation.
CBN Governor Yemi Cardoso announced the decision in Abuja on Tuesday during the final Monetary Policy Committee (MPC) meeting of 2024.
“The Committee was unanimous in its agreement to raise the monetary policy rate by 25 basis points to 27.50 percent,” Cardoso said, adding that the Cash Reserve Ratio (CRR) remains at 50% for Deposit Money Banks and 16% for Merchant Banks.
The MPC also retained the Liquidity Ratio at 30% and the Asymmetric Corridor at +500/-100 basis points around the MPR.
Cardoso explained that the move was driven by renewed inflationary pressures, noting that “headline, food, and core inflation measures rose year-on-year in October 2024.
Members therefore agreed unanimously to remain focused on addressing price developments.”
This marks the sixth interest rate hike by the CBN since February 2024. The last increase, to 27.25%, occurred in September after inflation eased slightly in August.
However, inflation surged again in October, with the National Bureau of Statistics (NBS) reporting a rate of 33.88%, up from 32.7% in September.
The NBS attributed the rise to higher transportation costs and food prices.
On a year-on-year basis, October’s inflation rate was 6.55 percentage points higher than the 27.33% recorded in the same month last year, according to the bureau’s Consumer Price Index (CPI).