In furtherance of its battle against rising inflation, the Central Bank of Nigeria (CBN) on Tuesday again raised its benchmark interest rate by 150 basis points to 26.25 per cent. This is the third straight hike this year all in a bid to control the rising prices of goods and services and to ensure the stability of the naira.
After the two-day Monetary Policy Committee (MPC) meeting in Abuja, the members agreed to hold other parameters unchanged. Consequently, the CBN retained the asymmetric corridor around the MPR at +100/-300 basis points, cash reserve ratio (CRR) at 45 percent, and retained the liquidity ratio (LR) at 30 percent.
Olayemi Cardoso, governor of the CBN, announced this in Abuja after the meeting. Reports indicate that most analysts have anticipated a 100 basis point increase in the Monetary Policy Rate (MPR) to rein in inflationary pressure.
The CBN’s move has satisfied the taste of investors for attractive yield but put borrowing costs high for the real sector and small and medium enterprises (SMEs).
