The Central Bank of Nigeria has increased monetary policy rate to 27.50% from the earlier 27.25% in which it was pegged.
This would mean that borrowing becomes costlier; the CBN also aims to use monetary policy rates to control inflation.
It is also aimed at ensuring that the naira becomes stronger.
According to a post on the official X account of the CBN, the bank voted to increase monetary policy rate by 250 points.
“The Monetary Policy Committee (MPC) Voted unanimously to raise Monetary Policy Rate (MPR) by 250 basis point from 27.25% to 27.50%” the statement read.
The CBN also voted to “retain Cash Reserve Ratio (CRR) at 50% for Deposit Money Banks and 16% for Merchant Banks.”
“The Committee also retains the Liquidity Ratio (LR) at 30% and Asymmetric Corridor at +500/-100 basis points around the MPR.” the apex bank posted.
The increase in monetary policy rates have failed to reduce the inflation in the country with general inflation and food inflation experiencing increase.
It is unclear if the CBN monetary policy rate does not affect government borrowings as state governments have continued to borrow increasingly from domestic sources.
The CBN have continued to insist that increasing monetary policy rates were vital to economic stability and recovery in the country.