CBN raises interest rate to 27.25 per cent

The Monetary Policy Committee of the Central Bank of Nigeria has approved an increase in the benchmark interest rate, known as the Monetary Policy Rate (MPR), to 27.25 percent.

The MPR serves as the foundation for all other interest rates in the economy, as they are all derived from it.

During a press briefing following the committee’s fifth meeting of the year at the CBN headquarters in Abuja on Tuesday, the governor of the Central Bank, Olayemi Cardoso, announced that the committee had unanimously agreed to further tighten monetary policy.

This decision marks a 50-basis-point increase from the previous rate of 26.75 percent, which was set in July 2024.

The new rate signifies an 8.5 percent hike in interest rates since the current leadership assumed office a year ago.

Cardoso stated;

“The committee was unanimous in its decision to further tighten policy and thus decided as follows, one: raise the MPR to 27.25 per cent.”

However, the MPC retained the asymmetric corridor around the MPR at +500 to -100 basis points and raised the Cash Reserve Ratio of deposit money banks by 500 basis points to 50 per cent and merchant banks by 200 basis points to 16 per cent from 14 per cent and retain the liquidity ratio at 30 per cent.

“The MPC decided to retain the asymmetric corridor around the MPR at plus 500 to minus 100 basis points. It also raised the Cash Reserve Ratio of deposit Money banks by 500 basis points to 50 per cent from 45 per cent and merchant banks by 200 basis points to 16 per cent from 14 per cent and retained the liquidity ratio at 30 per cent.”Cardoso said

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