The Central Bank of Nigeria (CBN) has again raised its Monetary Policy Rate (MPR), which is the benchmark interest rate by 50 basis points, from 26.25% to 26.75% amid soaring inflation and skyrocketing food prices.
CBN Governor, Olayemi Cardoso, announced this after the apex bank’s 296th Monetary Policy Committee (MPC) meeting in Abuja on Tuesday.
The MPC widened the “asymmetric corridor” around the MPR from +100 to -300 to +500 to -100 basis points.
The higher asymmetric corridor,” lifts the cost at which lenders can borrow to 500 basis points above the policy rate, and the return on their deposits was set at 100 basis points below the benchmark.
“The committee reemphasized its commitment to stay on course with this tightening cycle in view of the urgent need to address inflationary pressures,” Cardoso said. “Inflation really and truly is having a major impact on our economy, purchasing power is getting eroded, people are being pushed into different categories of poverty and it is in their own interest that we are able to tame the scourge of inflation.”
The MPC also retained the Cash Reserve Ratio (CRR) of deposit money banks at 45% and merchant banks at 14% and retained the Liquidity Ratio at 30%.
Cardoso said the committee was mindful of the effect of rising prices on households and businesses and expressed its resolve to take necessary measures to bring inflation under control.
He announced September 23 and 24 as the next meeting of the MPC.
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