CBN raises interest rate from 18 to 22.75%

CBN raises interest rate from 18 to 22.75%

The Central Bank of Nigeria has increased monetary policy rate otherwise known as interest rate from 18 per cent to 22.75 per cent.

It also raised the Cash Reserve Ratio from 35 per cent to 45 per cent.

The CBN’s Governor, Olayemi Cardoso, announced the rate adjustment at a news conference on Tuesday after the Monetary Policy Committee’s meeting in Abuja.

The monetary policy rate is the baseline interest rate in an economy, every other interest rate used within the economy is built on it.

The rate hike is the first monetary policy decision made by the committee since Cardoso assumed office on September 26, 2023.

Cardoso said the committee raised the MPR by 400 basis points to 22.75 percent, and adjusted the asymmetric corridor at +100 and -700 basis points from +100 basis points and -300 basis points around the MPR.

He said the committee also increased the Cash Reserve Ratio (CRR) from 32.5 per cent to 45 per cent, while retaining the liquidity rate at 30 percent.

He also spoke on inflation, saying the rate of change in prices of goods and services rose to 29.9 per cent in January 2024 — up from 28.92 per cent in the previous month.