The Central Bank of Nigeria (CBN) has once again raised the monetary policy rate, this time to 27.50 percent from the previous 27.25 percent. This marks the sixth time the CBN has increased interest rates since February 2024.
The decision was announced by CBN Governor Olayemi Cardoso following the conclusion of the Monetary Policy Committee (MPC) meeting in Abuja on Tuesday. The committee unanimously agreed to the 25 basis point hike.
In addition to raising the MPR, the CBN retained the Cash Reserve Ratio (CRR) at 50 percent for Deposit Money Banks and 16 percent for Merchant Banks. The Liquidity Ratio was kept at 30 percent, and the Asymmetric Corridor remains at +500/-100 basis points around the MPR.
Governor Cardoso cited renewed inflationary pressures, with both headline food and core measures rising year-on-year in October 2024, as the key factor behind the decision. “Members therefore agreed unanimously to remain focused on addressing price developments,” he stated.
This latest rate hike follows the CBN’s decision in September to increase the MPR by 50 basis points from 26.75% to 27.25%. At the time, small business owners expressed concern that the move would lead to further contraction of businesses, potential downsizing by firms, and job losses.