Central Bank of Nigeria Raises Monetary Policy Rate to 27.25%
The Monetary Policy Committee of the Central Bank of Nigeria has voted to increase the monetary policy rate (MPR) to 27.25%. This rate serves as the benchmark interest rate for the economy, with all other interest rates based on it.
During a press briefing following the committee's fifth meeting of the year at the CBN headquarters in Abuja, Governor Olayemi Cardoso announced that the decision to tighten monetary policy was unanimous among committee members. The new rate represents a 50 basis point increase from the previous 26.75% set in July 2024, reflecting an 8.5% rise in interest rates since the current leadership took office a year ago.
Cardoso stated, "The committee was unanimous in its decision to further tighten policy and thus decided to raise the MPR to 27.25%."
Additionally, the MPC maintained the asymmetric corridor around the MPR at +500 to -100 basis points and increased the Cash Reserve Ratio for deposit money banks by 500 basis points to 50%, while also raising the ratio for merchant banks by 200 basis points to 16% from 14%. The liquidity ratio remains unchanged at 30%.
"The MPC decided to retain the asymmetric corridor around the MPR at plus 500 to minus 100 basis points," Cardoso added.