As part of effortes to check current hyper inflation in the country, the Central Bank of Nigeria today raised interest rates in West Africa’s biggest country.
The CBN raised its benchmark interest rate, the Monetary Policy Rate MPR to 22.75 %.
The increase represents 400 basis points from the current 18.75%.
CBN Governor, Olayemi Cardoso disclosed this at the end of the Monetary Policy Committee, MPC meeting held in Abuja today, according to a Vanguard report.
Recall that in 2023, Nigeria’s MPC implemented a strategy of gradually increasing the MPR over four consecutive meetings.
Other important indices, such as the Cash Reserves Ratio (CRR) and Liquidity Ratio, stayed constant throughout the time despite these aggressive efforts, with the CRR remaining at 32.5% and the Liquidity Ratio at 30.0%.
Raise in interest rate is a typical monetary policy taken to control inflation and encourage savings, as interest paid on savings increase.
However, in the current Nigerian situation, it is difficult to agree that this will help as citizens have no money to save, while having to pay more than triple the old price for foods.
