LAGOS, Nigeria (VOICE OF NAIJA) – The Central Bank of Nigeria (CBN) on Tuesday increased the interests rates from 22.75 per cent as announced by the Monetary Policy Committee (MPC) in February to 24.75 per cent, raising them by 200 basis points.
The decision was made amidst the soaring inflation prices rocking the economy.
The decision came in response to the country’s escalating inflationary pressures, with the latest annual inflation rate surging to 31.70 per cent, according to the National Bureau of Statistics.
Governor Olayemi Cardoso disclosed the outcome of the two-day Monetary Policy Committee (MPC) meeting, held between Monday and Tuesday. The MPC voted to adjust the asymmetric corridor around the Monetary Policy Rate (MPR) by +100 to -300 basis points.
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Additionally, the committee voted to retain the Cash Reserve Ratio (CRR) at 45 per cent for commercial banks while adjusting the CRR of merchant banks from 10 per cent to 14 per cent. Liquidity was also retained at 30 per cent.
Cardoso emphasised the committee’s focus on addressing current inflationary pressures and anchoring inflation expectations, as well as ensuring sustained exchange rate stability. He highlighted the importance of restoring the purchasing power of ordinary Nigerians in the short to medium term, given the continued rise in headline inflation driven largely by food prices.
The committee commended the federal government’s efforts to address food insecurity through various measures, including the provision of palliatives, release of grains from strategic reserves, distribution of seeds and fertilizers, and support for dry season farming.
However, it stressed the need for broader fiscal consolidation, particularly improvements in tax collection and the tax-to-GDP ratio, to enhance food supply.