The Central Bank of Nigeria (CBN) has raised the Monetary Policy Rate (MPR) to 27.50%, up from 27.25%, as part of efforts to combat rising inflation. This decision, announced by CBN Governor Yemi Cardoso during the year’s final Monetary Policy Committee (MPC) meeting in Abuja on Tuesday, was unanimously approved by MPC members.

Despite the rate hike, other key monetary parameters remain unchanged. The Cash Reserve Ratio (CRR) stays at 50% for Deposit Money Banks and 16% for Merchant Banks, while the Liquidity Ratio (LR) remains at 30%, and the Asymmetric Corridor is maintained at +500/-100 basis points around the MPR.

Cardoso explained that the move was necessitated by renewed inflationary pressures. “The Committee was unanimous in its decision to raise the monetary policy rate by 25 basis points to 27.50%. This decision was made against the backdrop of rising inflation in October 2024 across headline, food, and core measures. The focus remains on addressing price developments,” he said.

This marks the sixth MPR hike in 2024, underscoring the CBN’s aggressive approach to controlling inflation. The previous hike in September to 27.25% coincided with a temporary decline in inflation, but recent data from the National Bureau of Statistics (NBS) shows worsening trends.

In October 2024, inflation surged to 33.88%, up from 32.7% in September a month-on-month increase of 1.18 percentage points. The rise has been attributed to higher transportation costs and food prices. Compared to October 2023, when inflation was 27.33%, this year’s figures reflect a year-on-year increase of 6.55 percentage points.

The CBN’s sustained rate hikes highlight its determination to stabilize the economy, though concerns persist about the broader economic impact, particularly on borrowing costs and growth.