The Central Bank of Nigeria’s Monetary Policy Committee has increased the benchmark interest rate by 150 basis points to 26.25 per cent from its previous 24.75 per cent.
The Governor of the CBN, Yemi Cardoso, disclosed this at the press briefing on Tuesday following apex bank’s 295th MPC meeting.
Cardoso stated further that the apex bank retained the Cash Reserve Ratio of Deposit Money Banks at 45 per cent while putting the asymmetric corridor around the MPR at +100/-300bps.
The CBN retains the liquidity ratio at 30 per cent.
The latest increase, which the apex bank boss attributed to continued efforts towards moderating inflation, which, according to the National Bureau of Statistics, reached 33.69 per cent in April, is the third in 2024.
Cardoso stated, “The committees’ decisions are as follows; raise the MPR by 150 basis points to 26.25% from 24.75%. Retain the asymmetric corridor around the MPR to +100 to –300 basis points. Retain the Cash Reserve Ratio (CRR) of Deposit Money Banks (DMBs) at 45% and retain the liquidity ratio at 30%.
“The key focus of the MPC at this meeting remained to achieve price stability by effectively using tools available to the monetary authority to rein in inflation. Members observed that while year-on-year headline inflation in April 2024 rose moderately, the month-on-month headline food and core inflation declined significantly.”
He noted that an increase in food prices is a major driver of inflation in the country and listed the factors responsible for the rise in food prices to increase in the transportation of farm produce, infrastructure-related constraints, security challenges in food-producing areas and exchange rate pass-through on domestic prices for imported food items.
