CBN Raises Interest Rate to 27.50% as Inflation Hits 33.87%

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has increased the country’s interest rate by 25 basis points, raising it from 27.25% in September 2024 to 27.50% in November.

CBN Governor Olayemi Cardoso announced the decision during a press briefing on Tuesday following the 298th MPC meeting in Abuja.

“The Committee unanimously agreed to raise the monetary policy rate by 25 basis points to 27.50%,” Cardoso stated, explaining that the move aims to address inflation, which stood at 33.87% in October 2024.

He further disclosed that the Cash Reserve Ratio for deposit money banks has been increased from 45% to 50%, while for merchant banks, it was raised from 14% to 16%. Other key rates, including the liquidity ratio, remain at 30%, and the asymmetric corridor is retained at +500/-100 basis points around the MPR.

All other monetary policy decisions were also upheld, Cardoso noted.

The monetary policy rate serves as the benchmark interest rate for the economy. During its September meeting, the MPC had raised the MPR by 50 basis points, citing concerns over core inflation, fiscal deficits, and rising food prices. Despite some easing in headline inflation at that time, core inflation remained high due to energy costs and structural challenges.