The CBN’s Monetary Policy Committee (MPC) has increased the benchmark interest rate by 200 basis points from 22.75% to 24.75%.
This was disclosed by the Governor of the CBN who doubles as the Chairman of the MPC while addressing the journalist at the end of the 294th MPC meeting held in Abuja.
Furthermore, the `apex bank retained the Cash Reserve Ratio (CRR) at 45%- unchanged from its last meeting but increased the CRR of merchant banks from 10% to 14% while retaining the liquidity ratio at 30%
The present Monetary Policy Rate (MPR) of 24.75% is unusually high, reflecting the bank’s strong commitment to tackling inflation and exchange rate fluctuations.
While this 200-basis points hike is steep, it still doesn’t surpass the substantial 400 basis points rise implemented by the bank in February.
He said that the Cash Reserve Ratio (CRR) of commercial banks was retained at 45 percent, while the CRR for merchant banks was increased to 14 percent from 10 per cent. But the Liquidity Ratio of banks was left at 30 percent.
Cardoso explained that members of the MPC were faced with continuing with the tightening cycle or a hold to see further impact of last month’s MPR hike but at the end, after reviewing the balance of risks, it was decided that a further tightening was the way to go.
The CBN Governor explained that, the impact of the decisions taken during the February Monetary Policy Committee (MPC) meeting on the country’s economy, focusing on inflation and the exchange rate.
Speaking on the foreign exchange The Apex bank boss insisted that the backlog of all valid FX transactions had been cleared, adding that security agencies is investigating infractions discovered by the audit firm.
Speaking On Binance, the governor reels out that CBN has collaborated with security and other agencies of government in handling the case. Adding that, it is the responsibility of security and exchange commission to regulate crypto currency.
However the next meeting of the Monetary Policy Committee (MPC) by the apex bank is scheduled for May 2024.
