The Central Bank of Nigeria (CBN) Monetary Policy Committee has raised the interest rate by 50 basis points to 27.25 per cent.
CBN governor, Olayemi Cardoso, disclosed this at the end of the MPC meeting held in Abuja.
Cardoso who is also the Chairman of the MPC, also disclosed that the Cash Reserve Ratio (CRR) of commercial banks was increased by 500 basis points from 45 per cent to 50 per cent while that of merchant banks was increased by 200 basis points to 16 per cent.
Furthermore, the MPC raised the asymmetric corridor around the MPR to +500 and –100 basis points while the liquidity ratio was retained at 30%.
According to Cardoso, the decision to further tighten the monetary policy was a unanimous one by members of the MPC and premised on recent events in the economy regarding inflation and the stability of the foreign exchange market.
He mentioned the threats of food inflation, flooding in many parts of the country, rising petrol and energy prices as reasons why further monetary policy tightening should be executed.
