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CBN raises interest rate to 22.75 percent, retains liquidity ratio at 30 percent

Dr. Olayemi Cardoso, Governor of CBN

*Dr. Olayemi Cardoso, Governor of the Central Bank of Nigeria, discloses the Bank’s Monetary Policy Committee has raised the country’s Monetary Policy Rate by 400 basis points to 22.75 percent from previuos 18.75 percent, as part of measures to tackle high inflation in the country

Isola Moses | ConsumerConnect

The Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) has raised the country’s Monetary Policy Rate (MPR) by 400 basis points to 22.75 percent from previuos 18.75 percent.

ConsumerConnect reports Dr. Olayemi Cardoso, Governor of CBN, disclosed this development Tuesday, February 27, 2024, after the first MPC meeting for the year in Abuja, FCT.

Cardoso, who chaired the MPC meeting, told reporters: “All 12 members of the Committee decided to further tighten monetary policy by raising the MPR by 400 basis points to 22.75 percent from 18.75 percent.

“Adjust the asymmetric corridor around the MPR to +100 to -700 from plus 100 to -300 basis points.”

This publication had reported Mr. Bismarck Rewane, Chief Executive Officer (CEO) of the Financial Derivatives Company Limited, projected the Monetary Policy Committee  of the CBN would have no option but to tighten interest rates in the country during their meeting betwee February 26 and 27.

Rewane, who earlier gave the projection during a recent interview on Channels TV, had noted the MPC might increase the country’s “interest rate by nothing less than 200 basis points”.

Hitherto, the MPR had been 18.75 percent since the last MPC meeting July 2023. However, in view of the inflationary trend at 29.90 percent, the CBN Chief said the new MPR is part of measures to tackle high inflation in the Westy African country.

He also noted the Cash Reserve Ratio (CRR) has been raised to 45 percent while the liquidity ratio was left unchanged at 30 percent.

In regard to the cryprocurrency market in Nigeria, Cardoso further said over $26 billion had passed through the crypto app Binance in the country in the last four years.

He explained: “In the case of Binance, in the last one year, 26 billion dollars has passed through Binance Nigeria from sources and users who we cannot adequately identify.”

As the current economic hardship bites harders in the past few months, leading to protests in several parts of Nigeria, the CBN Governor, however, exonerated himself and his team from the country’s economic woes.

We’re determined to work hard to get out Nigeria out of the woods

Cardoso said: “I laugh at that question, but it’s not a laughing matter and I think it is very important for Nigerians to understand that the Central Bank Governor —my team and I— are not responsible for the woes that we have today; we are part of the solution.”

The governor further assured Nigerians: “We are determined to ensure that we work hard to get out of the mess that Nigeria is in.

“We assumed responsibility in a time of crisis of confidence; there was a crisis of confidence and you may all want to go to bed and wish that crisis of confidence was not there but it was, and we can’t turn back the clock.”

He equally noted: “All we can do is do the difficult things to make a bad situation better and I do believe that the efforts that we are making are beginning to bring back confidence because to be frank, without confidence in your business, you are not going to get far.”

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