The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has announced a hike in the benchmark interest rate to 24.75 percent. This decision, revealed in a communique issued by CBN Governor Yemi Cardoso after the MPC meeting in Abuja, marks an increase from the previous rate of 22.75 percent set about a month ago.
Financial experts have expressed varied opinions on the outcome of the MPC meeting. Okechukwu Unegbu, former President of the Chartered Institute of Bankers of Nigeria (CIBN), suggested maintaining all rates to allow the economy to absorb the policy rates’ positive impact.
On the other hand, Prof. Uche Uwaleke, Director of the Institute of Capital Market Studies at Nassarawa State University, Keffi, highlighted persistent inflationary pressure despite a moderation in the exchange rate. He anticipated another round of tightening through the MPR, considering signals from the CBN governor and the inflation targeting stance.
Dr. Chijioke Ekechukwu, an economist and Managing Director of Dignity Finance and Investment Ltd., emphasized the need to assess the impact of recent tightening measures alongside other factors such as an increase in foreign currency supply.
The MPC meeting, which began on Monday and concluded on Tuesday, March 26, saw the committee revising the Monetary Policy Rate (MPR) upwards by 400 basis points to 24.75 percent from 18.75 percent in February. Additionally, the Cash Reserve Ratio (CRR) was raised to 45 percent from 32.5 percent, while the Liquidity Ratio and Asymmetric Corridor were retained at 30 percent and +100/-700 basis points around the MPR, respectively.
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