CBN increases interest rate to 24.75% to stem inflation
The Central Bank of Nigeria CBN’s Monetary Policy Committee (MPC) on Tuesday raised the benchmark interest rate to N24.75% up from the previous rate of 22.75%.
CBN Governor Yemi Cardoso, who spoke to journalists, stressed the committee’s commitment to curbing inflation and restoring the purchasing power of Nigerians.
He outlined the various policy adjustments implemented:
The most significant change is the substantial increase in the MPR to 24.75%. This makes borrowing more expensive, aiming to reduce spending and slow economic growth, ultimately bringing down inflation.
The CBN has also adjusted the Cash Reserve Ratio (CRR) for commercial banks, maintaining it at 45%. However, the CRR for merchant banks has been increased from 10% to 14%.
Additionally, the liquidity ratio remains unchanged at 13%. These measures aim to tighten control over the money supply in circulation, further dampening inflationary pressures.