The Central Bank of Nigeria (CBN) has increased the benchmark interest rate by 200 basis points to 24.75 percent, marking the second rate hike by the current Monetary Policy Committee (MPC).
The new rate is a substantial leap from the previous 22.75 percent.
CBN Governor Yemi Cardoso disclosed this on Tuesday, March 26, following the second MPC meeting of his tenure in Abuja.
The MPC also adjusted the Cash Reserve Ratio (CRR) of merchant banks from 10 percent to 14 percent, while retaining the CRR of deposit money banks at 45 percent and the liquidity ratio at 30 percent.
Cardoso explained that the committee’s considerations focused on the current inflationary pressures and the need to anchor inflation expectations.
“The moves are part of efforts to combat the country’s rising inflationary rate which was pegged at 31.70 percent in February,” he said.
The MPC’s decision comes amidst a clampdown on the cryptocurrency platform Binance by Nigerian authorities. Some Binance executives were detained in the country, with one recently escaping from custody.
While updating on the clampdown, Cardoso highlighted the CBN’s collaboration with other government agencies.
“We consider ourselves as having the wherewithal to collaborate with other agencies of government… About a month ago, we actually did have collaboration with law enforcement agencies, EFCC, the SEC, and other regulatory bodies as well, and what came out of that, is a work in progress, but very positive as far as I can say,” he stated.
He added that the responsibility for regulating cryptocurrency lies strictly with the Security and Exchange Commission, not the CBN.
The next MPC meeting is scheduled for the 20th and 21st of May, 2024.
