The Central Bank of Nigeria (CBN) has announced a 50 basis point increase in the Monetary Policy Rate (MPR), bringing it from 26.75% to 27.25%.
This decision was made during the Monetary Policy Committee (MPC) meeting held earlier on Tuesday and chaired by the CBN Governor, Olayemi Cardoso, as part of efforts to address Nigeria’s economic challenges and inflationary pressures.
In addition to the MPR hike, the MPC also voted to raise the Cash Reserve Ratio (CRR) for Deposit Money Banks (DMBs) from 45% to 50%, and from 14% to 16% for Merchant Banks.
The bank said these moves are aimed at tightening liquidity in the financial system and stabilizing the economy.
The committee, however, retained the Liquidity Ratio (LR) at 30% and maintained the Asymmetric Corridor at +500/-100 basis points around the MPR.
This latest policy shift comes as Nigeria continues to grapple with inflation and the need to maintain a balance between economic growth and price stability.
The MPC’s adjustments signal a commitment to using monetary tools to manage liquidity and control inflationary trends, while ensuring the financial system remains robust.
Financial analysts expect the changes to impact lending rates and overall economic activity in the coming months, as businesses and banks adjust to the tighter monetary conditions.
