The Central Bank of Nigeria (CBN) has increased the Monetary Policy Rate (MPR) from 27.25% to 27.50% in a bid to tackle rising inflation. This decision was made during the Monetary Policy Committee (MPC) meeting held at the CBN headquarters in Abuja, marking the final MPC session for the year. The CBN Governor, Yemi Cardoso, announced the development.
Cardoso explained that the MPC unanimously agreed to raise the MPR by 25 basis points, emphasizing the committee’s focus on addressing inflationary pressures in the economy. The Cash Reserve Ratio (CRR) for Deposit Money Banks was maintained at 50%, while that of Merchant Banks remained at 16%. Additionally, the Liquidity Ratio (LR) was retained at 30%, and the Asymmetric Corridor stayed at +500/-100 basis points around the MPR.
“The Committee was unanimous in its agreement to raise the monetary policy rate by 25 basis points to 27.50 percent,” Cardoso noted. He added that the decision was driven by renewed inflationary pressures, as food and core inflation measures rose year-on-year in October 2024. He stressed that the MPC remains committed to addressing price instability in the country.
This marks the sixth MPR hike by the CBN since February 2024. The previous adjustment occurred in September 2024 when the rate was raised to 27.25% following a temporary decline in inflation in August.
The latest figures from the National Bureau of Statistics (NBS) revealed that inflation surged to 33.88% in October 2024, up from 32.7% in September. This represents a 1.18 percentage point increase on a month-on-month basis. The NBS attributed the rise in inflation to escalating transportation costs and higher food prices. Year-on-year, the October 2024 inflation rate was 6.55 percentage points higher than the 27.33% recorded in October 2023.
The CBN’s recent measures highlight the urgency of containing inflationary pressures in Nigeria’s economy, which have significantly impacted the cost of living for citizens.
