Nigeria CBN Raises Interest Rate to 27.5% to Tackle Inflation

The Central Bank of Nigeria (CBN) raised the Monetary Policy Rate (MPR) to 27.5% to tackle inflation and stabilize the economy. Governor Olayemi Cardoso highlighted efforts to address price pressures, improve food production, and boost external reserves through monetary and fiscal collaboration for sustainable growth.

The Central Bank of Nigeria (CBN) has raised its Monetary Policy Rate (MPR) to 27.5%, marking a 25-basis-point increase from the previous 27.25%. This adjustment was announced by CBN Governor Olayemi Cardoso following the Monetary Policy Committee’s 298th meeting in Abuja.

Governor Cardoso stated that the decision was made to address persistent inflationary pressures and stabilize the economy. Other parameters, including the Cash Reserve Ratio (CRR) at 50% and the liquidity ratio at 30%, were maintained.

The committee highlighted the impact of rising energy costs and recent fuel price increases, which have driven up the cost of production and distribution. Despite these challenges, members commended improvements in national security, particularly in the northeast, which are expected to enhance food production.

The committee expressed optimism about the deregulation of the petroleum sector, anticipating it will eliminate fuel scarcity and stabilize price levels over time. Improved external reserves, supported by stronger remittances and capital inflows, were also noted as a positive development.

Cardoso emphasized the need for close collaboration between monetary and fiscal authorities to achieve price stability and sustainable growth. He reiterated the committee’s commitment to tackling inflation and improving citizens’ welfare.

This move underscores the CBN’s resolve to address economic challenges while promoting stability and fostering growth in Nigeria’s financial landscape.