The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Tuesday, raised the interest by 50 basis points to 26.75 per cent from 26.25 per cent in May 2024.
CBN governor, Olayemi Cardoso, announced this at a press briefing on Tuesday at the end of the two-day 296th MPC in Abuja.
He noted that the decision to further increase the interest rate is to tackle the country’s rising core inflation and food inflation which stood at 34.19 per cent and 40.87 per cent, respectively in June.
According to him, members of the MPC are not oblivious of the need to address the rising prices of food in Nigeria, necessitating the interest rate hike.
He added that all other monetary parameters remained unchanged. That is, the Cash Reserve Ratio remains at 45 percent for commercial banks and 14 percent for merchant banks. Similarly, the Liquidity ratio remained at 30 percent and the Asymmetric corridor stood at +500/100.
The 296th MPC meeting is the fourth time the interest rate has been increased since the appointment of Cardoso in September last year.
Recall that in May 2023, when President Bola Tinubu was inaugurated, Nigeria’s interest rate stood at 18.75 per cent while inflation rate stood at 22.41 per cent.