BREAKING: Manufacturers, Businesses Face Tough Time As CBN Raises Benchmark Interest Rate To 22.75 %

Borrowing cost is set to become more expensive as the Central Bank of Nigeria (CBN) has raised the Monetary Policy Rate (MPR) by 400 basis point to 22.7 per cent.

The Central Bank Governor, Olayemi Cardoso said this on Tuesday at the 293rd meeting of the Monetary Policy Committee (MPC) held at the CBN Headquarters in Abuja.

This is the first MPC held by the apex bank since Cardoso took over as CBN governor last year.

Announcing the decision, Cardoso said the committee agreed to raise the asymmetric corridor to +100 and -700; raise Cash Reserve Ratio from 32.5 per cent to 45 per cent and retain the Liquidity Ratio at 30 per cent.

Faced with rising inflation at 29.8 per cent and a currency that has depreciated, Cardoso is seeking monetary solutions to price and exchange rate stability.

The exchange rate went as high as N1,700 at the official exchange market last week and close to N2,000 per dollar at the Bureau de Change Segment of the Foreign Exchange Market.

Around January last year, the exchange rate was at about N470 at the official market and around N740 at the BDC segment before floating the currency on June 14, 2023.

In the last MPC held on July 25, 2023, the monetary authorities raised the Monetary Policy Rate from 18.5 per cent to 18.75 per cent as part of moves to calm inflation.

Cardoso said the consideration for the hike in MPR was based on the rising inflation.

“Members were concerned about the persistent rise in inflation and emphasised commitment to reverse the trend,” Cardoso said.