The Central Bank of Nigeria (CBN) on Tuesday raised the interest rate to 22.75 per cent amid soaring inflation.
The apex bank made this known after the two-day Monetary Policy Committee (MPC) meeting held between Monday and Tuesday.
According to the National Bureau of Statistics, the country’s annual inflation rate jumped to 29.90 per cent in January from 28.92 per cent in December 2023, primarily fueled by a continuous surge in food prices.
Olayemi Cardoso, the governor of the CBN, on Tuesday, disclosed that the MPC voted to keep the Cash Reserve Ratio (CRR) at 45 per cent while the Liquidity Ratio was retained at 30 per cent.
According to him, the committee recognised the need to continue to put in place measures to boost investor confidence and attract capital inflows.
“To this end, the committee will continue to monitor developments in the global and domestic economies to ensure that inflationary and exchange rate pressures moderate in the near term,” he said.
He said the committee identified non-monetary factors driving inflation such as persisting insecurity and infrastructure deficits and noted the role of fiscal policy in addressing these shortfalls while reiterating the commitment of monetary policy support.
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“In this regard, the committee applauded fiscal policy initiatives towards reducing the cost of living for ordinary Nigerians including the ongoing efforts to increase food supply and provide mass transit CNG buses to ease the cost of transportation and the civil service reforms to improve the efficiency of government amongst others”
He announced that the next meeting of the MPC will be held on 25 and 26 March.
Mr Cardoso had earlier expressed concerns about the impact of previous MPC meetings on the economy, noting that the MPC will complement the fiscal side and ensure that it moves the economy in the right direction.
The 12-member committee headed by the CBN Governor was confirmed by the Senate on 22 February.
