Updated: We raised interest rate to 24.75 percent to fight inflation – CBN

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) said it hiked the benchmark interest rate by 200 basis points to 24.75 percent to fight inflation.

The CBN governor, Dr. Yemi Cardoso, announced this in a communiqué at the conclusion of the second MPC meeting in 2024, which took place on Tuesday in Abuja.

According to Persecondnews, the new interest rate is an increase from the 22.75 percent that the MPC announced about a month ago and the second rate hike by the current committee.

According to Cardoso, the move is part of efforts to combat the country’s rising inflationary rate, which was pegged at 31.70 percent in February.

He announced the retention of the Cash Reserve Ratio (CRR) of deposit money banks at 45 percent.

However, the MPC adjusted the CRR of merchant banks from 10 percent to 14 percent and retained the liquidity ratio at 30 percent.

“The considerations of the committee at this meeting focused on the current inflationary pressures and the need to anchor inflation expectations as well as ensure sustained exchange stability,” Cardoso said.

He said MPC members also believe that a rise in the price of food is primarily to blame for the country’s overall inflation.

Commending the Federal Government’s efforts at curbing food insecurity, including the distribution of palliatives, the CBN boss said: “The committee therefore was of the view that addressing food insecurity is key to containing the current inflationary pressures.’’

The next meeting of the Monetary Policy Committee (MPC) by the apex bank is scheduled for May 2024.