In its latest announcement, the Central Bank of Nigeria has opted to increase the monetary policy rate, commonly referred to as the interest rate, by 400 basis points, now standing at 22.75%, up from the previous 18.5%.
At the 293rd Meeting of the Monetary Policy Committee press briefing in Abuja, the Governor of the CBN, Olayemi Cardoso, unveiled this significant adjustment.
The primary objective behind this move is to address the country’s surging inflation rate, which registered at a troubling 29.90% in January.
Furthermore, the bank has also chosen to raise the Cash Reserve Ratio from 32.5% to 45%.
Commenting on the decision, Cardoso stated, “We anticipate that these measures will lead to a moderation in the short to medium term. We are committed to collaborating closely with other governmental bodies to address the fiscal elements contributing to inflation, particularly in light of the prevailing insecurity situation.”
Speaking on the implementation of its policies, Cardoso emphasized, “From the perspective of the CBN, we are transitioning to a more stringent regulatory landscape.”
He reiterated that the CBN will persist in enhancing market liquidity, cautioning that non-compliant operators will face repercussions.
The last occasion on which the MPC raised interest rates was in July.
NewsNow revealed that the MPC convened for its inaugural meeting since its installment in September, intending to reinforce monetary policy actions.
Recollections depict the CEO of the Financial Derivatives Company, Bismarck Rewane, prophesying that the Monetary Policy Committee of the Central Bank would have no alternative but to amplify interest rates given the mounting inflation and economic adversities being encountered.