The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), has raised the country’s baseline lending rate by 150 basis points to 26.25 per cent.
CBN Governor, Olayemi Cardoso, the said this on Tuesday in Abuja, while reading the communique from the 295th meeting of the MPC.
This is the third consecutive time the apex bank will be raising the benchmark rate this year and under the Cardoso leadership.
The bank, however, retained the Cash Reserve Ratio (CRR) of Deposit Money Banks (DMBs) at 45% and put the Asymmetric corridor around the MPR at +100 and –300 basis points.
The CBN has raised interest rates 11 consecutive times since May 2022 in a bid to rein inflation, which has risen from 17.71 percent to 33.69 percent, between May 2022 and April 2024.
Cardoso said the committee retained the asymmetric corridor at +100 basis points and -300 basis points around the MPR and also retained the cash reserve ratio (CRR) at 45 per cent for deposit money banks (DMBs) and 14 per cent for merchant banks.
He noted that the liquidity ratio (LR) was left unchanged at 30 percent.
Cardoso attributed the reason for the hike to the need to tighten inflation, which according to the him, “is working.”
He explained that following an extensive review of risks and the near-term inflation outlook, the balance of risks suggests further tightening of policy to build on the benefits accrued from previous rate hikes.
Cardoso said the key focus of MPC at the meeting was to achieve price stability by effectively using tools available to the monetary authority to rein inflation.
