In a bold move aimed at curbing inflation and stabilising the economy, the Central Bank of Nigeria (CBN) has announced a substantial increase in the monetary policy rate (MPR) to an unprecedented 22.75 percent . This decision, unveiled by CBN Governor, Mr. Yemi Cardoso, during his inaugural chairing of the Monetary Policy Committee (MPC) meeting, marks the highest rate hike in the country’s history.
The move comes amidst growing concerns over inflationary pressures and economic volatility. In 2023, the MPC adopted a gradual approach, incrementally raising the MPR over four consecutive meetings, culminating in a significant 18.75 percent rate by year-end. However, the current escalation to 22.75 percent signals a departure from previous tactics, reflecting the urgency to address mounting economic challenges.
While the MPR takes centre stage, other key indicators such as the cash reserves ratio (CRR) and liquidity ratio remain unchanged, holding steady at 32.5 percent and 30.0 percent respectively throughout the period. This singular focus on the MPR underscores the CBN’s determination to tackle inflation head-on, even as it maintains stability in other areas of the financial landscape.
The decision to raise the MPR to such unprecedented levels underscores the CBN’s commitment to taking decisive action in the face of economic uncertainty. As Nigeria grapples with the challenges of inflation and economic instability, all eyes are on the central bank to navigate these turbulent waters and steer the country towards a path of sustainable growth and prosperity.
