The Central Bank of Nigeria (CBN) has raised the Monetary Policy Rate (MPR) to 27.50% from 27.25%, marking the sixth rate hike since February 2024. This decision was announced by CBN Governor, Mr. Olayemi Cardoso, following the Monetary Policy Committee (MPC) meeting held in Abuja.
Cardoso stated that the MPC voted unanimously to increase the MPR by 25 basis points, while maintaining the Cash Reserve Ratio (CRR) at 50% for Deposit Money Banks, 16% for Merchant Banks, and the Liquidity Ratio at 30%. The Asymmetric Corridor also remains at +500/-100 basis points around the MPR.
“The Committee was unanimous in its agreement to raise the monetary policy rate to 27.50% in response to renewed inflationary pressures, particularly in headline, food, and core inflation, which rose year-on-year in October 2024,” Cardoso explained.
The decision follows a previous hike in September, when the MPR was raised by 50 basis points from 26.75% to 27.25%.
Economic Implications
Small business owners have criticized the rate hike, warning that it could contract businesses and lead to further job losses. They argue that higher borrowing costs will reduce access to credit, forcing companies to downsize.
The MPC’s move reflects its ongoing efforts to address inflation, but the ripple effects on businesses and employment remain a growing concern.
