Central Bank of Nigeria Hikes Interest Rate to 27.50%
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) at the end of a two-day policy meeting hiked the benchmark interest rate to 27.50% as the fight against inflation takes a new turn.
The Governor of the CBN and Chairman of the MPC, Yemi Cardoso, announced the raise on Tuesday in Abuja, while presenting a communiqué after the 298th meeting of the committee.
The CBN became less hawkish than anticipated by a slew of analysts, who predicted a 50 basis point interest rate hike for the November meeting. At the end of the monetary policy committee’s final meeting in 2024, members voted to raise policy rate by 25 basis points to 27.50% from 27.25%
The committee, however, retained the asymmetric corridor at +500bps/-100bps, while the cash reserve ratio (CRR) for deposit money banks has been kept at 50.0% and for merchant banks at 16.0%. The liquidity rate is also kept at 30.0% #Central Bank of Nigeria Hikes Interest Rate to 27.50%
Cardoso said that the decisions on key rates were unanimously adopted by all 12 members of the monetary policy committee who were present at the meeting. The rate decision today is the sixth consecutive tightening of the MPR since Cardoso assumed office as CBN governor.
The first decision under Cardoso was an aggressive hike in the MPR by 400 basis points from 18.75 percent to 22.75 percent in February.
In March, the committee again increased the MPR by 200 basis points to 24.75 percent, followed by subsequent hikes to 26.25% in May, 26.75 percent in July, and 27.25 basis points in September.
Cardoso has, thus, raised the MPR by 875 basis points since he assumed office. These decisions are aimed at combating inflation, stabilising the economy, and promoting economic growth #Central Bank of Nigeria Hikes Interest Rate to 27.50% FX Stability: CBN Sells 122.671m Dollars to 46 Authorised Dealers
