By Milcah Tanimu

On July 23, 2024, the Central Bank of Nigeria (CBN) increased the monetary policy rate (MPR) to 27.75%, up from 26.25%. This decision was announced by CBN Governor Olayemi Cardoso at the conclusion of the monetary policy committee’s 296th meeting in Abuja.

The adjustment comes in response to Nigeria’s inflation rate, which recently surged to 34.19% due to rising food prices. The MPR serves as the baseline interest rate for the economy, influencing all other interest rates.

In addition to raising the MPR, the committee also decided to adjust the asymmetric corridor to +500 and -100 basis points around the MPR. The cash reserve ratio (CRR) remains at 45%, and the liquidity ratio is maintained at 30%.

The CBN’s move reflects ongoing concerns about inflation and aims to stabilize the economic environment.