- By Halimah Olamide
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has on Tuesday increased the benchmark interest rate by 200 basis points to 24.75 percent.The Council moved to the present rate from 22.75 percent announced about a month ago. Cardoso announced the retention of the Cash Reserve Ratio (CRR) of deposit money banks at 45 percent. However, the MPC adjusted the CRR of merchant banks from 10 percent to 14 percent.
The committee also retained the liquidity ratio at 30 percent. “The considerations of the committee at this meeting focused on the current inflationary pressures and the need to anchor inflation expectations as well as ensure sustained exchange stability,” the CBN chief said.
He said the moves are part of efforts to combat the country’s rising inflationary rate which was pegged at 31.70 percent in February.
Cardoso noted that MPC members believe the headline inflation in the country is triggered mostly by a hike in the cost of food.
“The committee therefore was of the view that addressing food insecurity is key to containing the current inflationary pressures,” he said while commending the Federal Government’s efforts at curbing food insecurity including the distribution of palliatives.