The Central Bank of Nigeria’s Monetary Policy Committee (MPC) has raised the country’s benchmark interest rate to 27.25%, marking a 50 basis points increase from the previous 26.75% set in July 2024. This decision, announced by CBN Governor Olayemi Cardoso during a press briefing on Tuesday in Abuja, reflects the committee’s unanimous resolve to tighten monetary policy further.
The new rate comes as part of ongoing efforts to control inflationary pressures, with the MPR now seeing an 8.5% increase under the leadership of Cardoso, who assumed office a year ago.
In addition to the hike in interest rates, the MPC adjusted the Cash Reserve Ratio (CRR) for deposit money banks, raising it by 500 basis points to 50%, and increased the CRR for merchant banks from 14% to 16%. The liquidity ratio remains unchanged at 30%.
Governor Cardoso explained, “The committee was unanimous in its decision to further tighten policy and thus decided as follows: raise the MPR to 27.25 per cent.”
Despite expectations from some financial experts that the CBN might hold or lower rates due to recent drops in inflation, the MPC’s decision signals a continued focus on tightening to ensure macroeconomic stability.
