In an attempt to counteract the soaring inflation, the Central Bank of Nigeria (CBN) increased the Monetary Policy Rate (MPR) from 27.25 percent to 27.50 percent.
The NBS report in October 2024 revealed inflation rate at 33.88% a few weeks ago.
However, they made their decision after the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) meeting. The benchmark interest rate is measured by the monetary policy rate.
This was revealed by CBN Governor Yemi Cardoso in Abuja on Tuesday at the apex bank’s headquarters during the year’s final MPC meeting.
According to Cardoso, the MPC unanimously decided to keep the Cash Reserve Ratio (CRR) at 50% for deposit money banks and 16% for merchant banks, while increasing the MPR by 25 basis points, from 27.25% to 27.50%.
“The Committee was unanimous in its agreement to raise the monetary policy rate by 25 basis points to 27.50 percent,” Cardoso said.
The CBN chief also said the MPC retained the Liquidity Ratio (LR) at 30% and Asymmetric Corridor at +500/-100 basis points around the MPR.
“The considerations of the meeting were held on the backdrop of renewed inflationary pressures as the headline food and core measures rose year on year in October 2024. Members therefore agreed unanimously to remain focused on addressing price developments,” Cardoso said.
Since February 2024, the CBN has raised interest rates six times. After a decline in the nation’s inflation rate in August 2024, the bank raised the rate to 27.25% in September.
The National Bureau of Statistics (NBS) predicted earlier this month that the nation’s inflation rate will increase from 32.7% in September 2024 to 33.88% in October 2024.
It reflected a 1.18 percentage point month-on-month hike. The NBS in its Consumer Price Index (CPI) attributed this to increased transportation costs and higher food prices.
According to the agency, on a year-on-year basis, the headline inflation rate was 6.55% points higher than the rate reported in October 2023 (27.33%).
