The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), on Tuesday increased the Monetary Policy Rate (MPR), also known as interest rate,  by 400 basis points to 22.75 per cent from 18.75 per cent.

The CBN Governor, Yemi Cardoso, who chairs the MPC , announced the committee’s decisions on Tuesday after the meeting.

“All 12 members of the committee decided to further tighten monetary policy by raising the MPR by 400 basis points to 22.75 per cent from 18.75 per cent. Adjust the asymmetric corridor around the MPR to +100 to -700 from plus 100 to -300 basis points,” he said.

The MPR has been 18.75 percent since the last MPC meeting between 24th and 25th July 2023.

With inflation at 29.90 percent, the CBN Governor said the new MPR is part of moves to tackle rising inflation.

Cardoso said that the asymmetric corridor around the MPR was adjusted to +100 – 700 basis points from + 100 -300 basis points.

“The Cash Reserve Ratio (CRR) was increased from 32.5 per cent to 45 per cent, while the Liquidity Ratio was retained at 30 per cent.

“The committee decisions is centred around the current inflationary and exchange rate pressures, projected inflation, and rising inflation expectations.

“Members are concerned about the persistent rise in the level of inflation and emphasised the committee’s commitment to reverse the trend as the balance of risk leans towards rising inflation.

” The committee, however, acknowledged the tradeoff between the pursuit of output growth and taming inflation but was convinced that an enduring output expansion is possible only in environment of low and stable inflation,” he said.