The Central Bank of Nigeria (CBN) Monetary Policy Committee has decided to further raise interest rate by 50 basis points to 27.25%.
The Governor of the CBN, Mr. Yemi Cardoso who doubles as the Chairman of the MPC disclosed this at the end of the MPC meeting held in Abuja.
The apex bank further increased the Cash Reserve Ratio (CRR) of commercial banks by 500 basis points from 45% to 50% while that of merchant banks was increased by 200 basis points to 16%.
Furthermore, the MPC raised the asymmetric corridor around the MPR to +500 and –100 basis points while the liquidity ratio was retained at 30%.
The Governor of the CBN noted that the decision to further tighten the monetary policy was a unanimous one by members of the Monetary Policy Committee (MPC).
According to the CBN, the decision to raise interest rate was premised on recent events in the economy regarding inflation and the stability of the foreign exchange market.
He mentioned the threats of food inflation, flooding in many parts of the country, rising petrol and energy prices as reasons while further monetary policy tightening should be executed.
On its one-year anniversary, the management of the CBN under Yemi Cardoso will continue on its bullish monetary policy stance it began around February this year.