CBN Raises Interest Rate to 27.50% to Combat Inflation

The Central Bank of Nigeria (CBN) has increased the interest rate by 25 basis points to 27.50% to tackle the rising inflation rate, which stood at 33.87% in October 2024.

This decision was made during the 298th Monetary Policy Committee (MPC) meeting held in Abuja.

The CBN Governor, Olayemi Cardoso, said the committee unanimously agreed to raise the monetary policy rate to combat inflation.

“The Committee was unanimous in its agreement to raise the monetary policy rate by 25 basis points to 27.50 per cent,” he said.

In addition to the interest rate hike, the Cash Reserve Ratio was retained at 50 basis points, with deposit money banks required to hold between 45% to 50% of their deposits, and merchant banks required to hold between 14% to 16% of their deposits.

Meanwhile, the CBN governor noted that the committee retained the liquidity ratio at 30 per cent and the asymmetric corridor at +500/-100 basis points around the MPR.

Similarly, Cardoso stated that the committee retained all other monetary policy decisions.

Recalled that Economic confidential had reported at the last MPC meeting in September that the committee raised the monetary policy rate (MPR), which benchmarks interest rates, to 27.25 percent — from 26.75 percent.