• Saturday, April 20, 2024
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BusinessDay

CBN raises key rate by most on record to defend naira, tame inflation

The Central Bank of Nigeria (CBN) on Tuesday raised its benchmark interest rate, known as the Monetary Policy Rate (MPR) to 22.75 percent, for the first time in eight months. The CRR was increased to 45 percent.

According to CBN data, this is the highest MPC rate ever and is aimed at mopping up excess naira liquidity.

 interest rate up to 22.75 percent

Olayemi Cardoso, governor of the CBN, who chaired the Monetary Policy Committee (MPC) meeting for the first time since he assumed office in September 2023, made the announcement Tuesday.

In 2023, Nigeria’s MPC adopted a distinct approach, steadily increasing the MPR across four consecutive meetings, ultimately reaching a substantial 18.75 percent by the end of the year. Despite these proactive measures, other significant indicators such as the Cash Reserves Ratio (CRR) and Liquidity Ratio remained static, with the CRR staying at 32.5 percent and the Liquidity Ratio at 30.0 percent throughout the period.

Details soon…