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CBN Raises Monetary Policy Rate to 22.75% in First MPC Meeting of the Year

The Central Bank of Nigeria (CBN) announced a significant increase in the Monetary Policy Rate (MPR) from 18.75 percent to 22.75 percent during its first Monetary Policy Committee (MPC) meeting for the year in Abuja on Tuesday.
Governor Yemi Cardoso disclosed the decision, highlighting the unanimous agreement among all 12 committee members. The adjustment aims to address the country’s high inflation rate, currently at 29.90 percent.
“All 12 members of the committee decided to further tighten monetary policy by raising the MPR by 400 basis points to 22.75 per cent from 18.75 per cent. Adjust the asymmetric corridor around the MPR to +100 to -700 from plus 100 to -300 basis points,” he said.
The MPR has been 18.75 percent since the last MPC meeting between 24th and 25th July 2023.
With inflation at 29.90 percent, he said the new MPR is part of moves to tackle the country’s inflation.
Additionally, Cardoso who chairs the MPC also said the Cash Reserve Ratio (CRR) was raised to forty-five percent, while the liquidity ratio remained unchanged at thirty percent.
Cardoso also raised concerns about the significant financial activity, noting over $26 billion passing through the crypto app Binance Nigeria in the last four years.
“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,” he told reporters in his first MPC meeting since assuming office as the CBN governor.
Despite economic challenges and protests across Nigeria, Cardoso defended the CBN’s role, emphasizing their commitment to improving the country’s economic situation and restoring confidence in business operations.
“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 — I and my team — are not responsible for the woes that we have today; we are part of the solution,” the former Lagos State Commissioner for Economic Planning and Budget said while responding to a question on how the CBN intends to tackle the country’s biting economic hardship.
“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.
“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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