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CBN Raises Benchmark Interest Rate to Tackle Inflation

In efforts to address the escalating inflation rates, the Central Bank of Nigeria (CBN)’s Monetary Policy Committee (MPC) announced a significant uptick in the benchmark interest rate.

The newly revised Monetary Policy Rate (MPR), unveiled during Tuesday’s announcement, now stands at 24.75%, marking a notable increase from the previous rate of 22.75%.

In a press briefing following the MPC meeting, CBN Governor Yemi Cardoso underscored the committee’s dedication to tackling inflation and restoring the purchasing power of Nigerians.

Governor Cardoso outlined the series of policy adjustments as follows:

The most notable adjustment is the substantial rise in the MPR to 24.75%. This move aims to make borrowing more costly, with the intention of curbing spending and moderating economic expansion, ultimately leading to a decrease in inflation.

The CBN has made changes to the Cash Reserve Ratio (CRR) for commercial banks, maintaining it at 45%. However, the CRR for merchant banks has been raised from 10% to 14%.

Moreover, the liquidity ratio remains steady at 13%. These policy adjustments are designed to enhance control over the money supply in circulation, thereby mitigating inflationary pressures.

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