Dr Olayemi Michael Cardoso, acting Governor of CBN
Again, CBN raises interest rate to 27.50%
The Central Bank of Nigeria (CBN) has once again raised its interest rate from 27.25% to 27.50%, in order to fight rising inflation in the country.
This decision came after the CBN’s Monetary Policy Committee, MPC, meeting on Tuesday, chaired by the CBN Governor, Mr. Yemi Cardoso, in Abuja.
A statement personally signed by the CBN Governor, Olayemi Cardoso, dated November 26, 2024, stated that the MPC unanimously agreed to raise the interest rate by 25 basis points to 27.50%, up from its previous level in September.
The central bank monetary policy committee has thus raised interest rates 6 times in a row and every single meeting held this year.
Meanwhile, the Committee also decided to retain the Monetary Policy Reserve Ratio (CRR) at 50% for Deposit Money Banks and 16% for Merchant Banks.
The Liquidity Ratio (LR) remains unchanged at 30%, alongside the Asymmetric Corridor, which stays at +500/-100 basis points around the Monetary Policy Rate (MPR).
According to the statement, “The Committee has decided unanimously to further tighten its monetary policies and decided thus: one, raise the MPR by 25 basis points to 27.5%. Two, retain the asymmetry corridor around the MPR at +500/-100 basis point.
“Three, the committee retain the Cash Reserve Ratio (CRR) of deposit money banks at 50% and merchant banks at 16%. Four the committee decided to retain the liquidity ratio at 30%,” Cardoso said.
Cardoso also stated that the committee’s decision was made against the backdrop of a renewed hike in inflationary pressure in the country.
He recalled the headline inflation, which, according to the National Bureau of Statistics (NBS), rose to 33.88% in October 2024.
He said the committee considered the following increases in inflation affecting price stability:
Headline inflation
Core inflation
Food inflation
“The meeting was held on the backdrop of renewed inflationary pressures as the headline, food and core measures rose year-on-year in October 2024. The committee was particularly concerned all 3 measures also hitch up on a month-on-month basis, suggesting the persistence of price pressure with an adverse impact on the income and welfare of citizens.
“Members therefore agreed unanimously to remain focused in addressing price development,” he said.