Business
CBN raises Nigeria’s interest rate to 27.25%, fifth time in a row
The Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) has again raised the interest rate by 50 basis points to 27.25 percent.
This is the fifth hike since February 2024.
CBN Governor Olayemi Cardoso disclosed this during a press briefing at the end of 297th MPC in Abuja on Tuesday.
The development comes as the country’s inflation rate eased for the second consecutive month in August to 32.15 percent, according to the National Bureau of Statistics, NBS.
The CBN governor also revealed the committee retained the asymmetric corridor at +500 and -100 basis points around the MPR.
The committee, according to him, equally, increased the cash reserve ratio (CRR) from 45 percent to 50 percent and retained the liquidity at 30 percent.
Cardoso said the MPC agreed to increase monitoring of future releases to address its effect on price developments.
He added that the committee noticed the relative stability and convergence in the exchange rate across the various market segments resulting from the apex bank’s tight monetary policy stance.
READ ALSO: CBN hikes interest rates to record 26.75% to fight inflation
The CBN governor said this would help improve confidence and enable economic agents to plan in the medium to long term.
He said: “The committee was, however, unanimous in recognising that a lot more is required to actualise the bank’s price stability mandate.
“The MPC noted that even though headline inflation trended downwards due to a moderation in food inflation, core inflation has remained elevated, driven primarily by rising energy prices.
“The uptrend poses severe concerns to members as it indicates the persistence of inflationary pressures. Members thus reiterated the need to work in close collaboration with the fiscal authority to address the current upward pressure on energy prices.
“The MPC noted the continued growth in money supply, recognising the need to curtail excess liquidity in the system as well as address foreign exchange demand pressures.”
By: Babajide Okeowo
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