The Central Bank of Nigeria (CBN) has raised Monetary Policy Rate (MPR) by 200 basis points from 22.75 per cent to 24.75 per cent.
The committee also retained the Cash Reserve Ratio (CRR) at 45 per cent for Deposit Money Banks (DMBs), and 14 per cent for Merchant Banks.
It left the Liquidity Ratio (LR) unchanged at 30 per cent; the Asymmetric Corridor reversed to +100/-300 basis points around the MPR.
These decisions were announced at the 294th Monetary Policy Committee (MPC) meeting concluded today Tuesday, 26th of April, 2024.
Analysts had earlier anticipated that the MPC members might consider further monetary tightening or hold rates steady to watch the effect of the last meeting interest rate hike.
Recall that the first MPC meeting for the year concluded with votes to raise the benchmark Monetary Policy Rate (MPR) by 400bps to 22.75percent, recalibrate the asymmetric corridor around the MPR to +100/-700bps from +100/-300bps, and move the Cash Reserve Ratio (CRR) up 12.5ppts to 45.0percent.
Given that the hike was implemented in late February, its impact was not noticeable in the latest CPI update which was published in March for price changes in the preceding month.
The decision of the MPC was judged in line with global trends.
For Nigeria, dealers anticipated further tightening of policy rate saying that other key parameters are likely to be left at current levels.
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