In response to the persistent challenge of soaring inflation, the Central Bank of Nigeria (CBN) has announced a significant hike in the monetary policy rate, raising it by 400 basis points from 18.5% to 22.75%. CBN Governor Olayemi Cardoso revealed this decision during the 293rd Meeting of the Monetary Policy Committee press briefing in Abuja. The move aims to curb the country's inflation rate, which reached 29.90% in January.
The Cash Reserve Ratio has also been increased to 45% from 32.5%. Cardoso emphasized the intention to collaborate with other government bodies, particularly addressing fiscal aspects related to inflation and insecurity.
The CBN emphasizes its commitment to an aggressive regulatory environment, signaling consequences for non-compliance. This marks the first tightening of monetary policy measures since the MPC's appointment in September, reflecting the gravity of economic challenges.
Financial experts, including Bismarck Rewane, anticipate a necessity for interest rate tightening amid prevailing economic hardships.
