The Central Bank of Nigeria (CBN) has implemented a moderate increase in the monetary policy rate (MPR), raising it from 18.5% to 18.75%.
The MPR serves as the foundational interest rate in the economy, influencing all other interest rates utilized within the country.
Mr. Folashodun Shonubi, the Acting CBN Governor, made the announcement regarding the MPR hike during the 292nd Meeting of the Monetary Policy Committee (MPC) press briefing held on Tuesday.
“To summarize, the MPC has decided to raise the policy rate by 25 basis points, from 18.5% to 18.75%. Additionally, the asymmetric corridor has been adjusted to +100, -300 basis points around the MPR. The Cash Reserve Ratio (CRR) will be maintained at 32.5%, and the liquidity ratio will remain at 30%,” stated Mr. Shonubi.
CRR represents the percentage of a bank’s total customer deposits required to be kept in the form of liquid cash with the central bank. Meanwhile, the liquidity ratio indicates the proportion of deposits and other assets that banks must maintain to meet short-term obligations.
