JUST IN: CBN Increases Interest Rate to 26.25%

The Monetary Policy Rate (MPR) is the key determinant of commercial banks' interest rates.

Olayemi Cardoso, the governor of the apex bank, revealed this increase at a news conference on Tuesday, during the 295th meeting of the MPC, according to Channels.

Cardoso, however, reserved the cash reserve ratio of deposit money banks at 45 percent and the asymmetric corridor for the adjusted money policy rate at +100 and -300 basis points.

"The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) held its 295th meeting on the 20th and 21st of May 2024 to review recent economic and financial developments and assess risks to the outlook,ÔÇØ Cardoso was quoted as saying.

"Decisions of the MPC. The committee's decisions are as follows: 1. Raise the MPR by 150 basis points to 26. 25 percent from 24.75 percent.ÔÇØ

Cardoso was also quoted as saying the hike was necessary to tighten inflation in the country: "Following an extensive review of risks and the near-term inflation outlook, the balance of risks suggests further tightening of policy to build on the benefits accrued from previous rate hikes.ÔÇØ