By Anthony Otaru, Abuja
The Central Bank of Nigeria (CBN) has raised the Monetary Policy Rate (MPR) to 27.50 percent from 27.25 percent to combat surging inflation.
This followed the meeting of the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC). The monetary policy rate measures the benchmark interest rate.
Meanwhile, the latest report by the National Bureau of Statistics indicated that Nigeria’s headline inflation rate increased to 33.88 percent in October 2024, up from 32.7 percent in September 2024, reflecting a 1.18 percentage point month-on-month increase.
CBN Governor Yemi Cardoso announced this in Abuja yesterday during the last MPC meeting of the year at the apex bank’s headquarters.
Cardoso said the MPC voted unanimously to raise the MPR by 25 basis points from 27.25 percent to 27.50 percent and retain the Cash Reserve Ratio (CRR) at 50 percent for Deposit Money Banks and 16 percent for Merchant Banks.
“The Committee was unanimous in its agreement to raise the monetary policy rate by 25 basis points to 27.50 percent,” Cardoso said.
The CBN chief also said the MPC retained the Liquidity Ratio (LR) at 30% and Asymmetric Corridor at +500/-100 basis points around the MPR.
“The considerations of the meeting were held on the backdrop of renewed inflationary pressures as the headline food and core measures rose year on year in October 2024. Members, therefore, agreed unanimously to remain focused on addressing price developments,” Cardoso said.
This is the sixth time the CBN has raised the interest rate since February 2024.
The bank pushed the rate to 27.25 percent in September following a drop in the country’s inflation level in August 2024.
*NBS October report puts inflation at 33.88%
The NBS’s October report stated that the headline inflation rate increased to 33.88 percent in October 2024, up from 32.7 percent in September 2024, reflecting a 1.18 percentage point month-on-month increase.
This was contained in the National Bureau of Statistics (NBS) Consumer Price Index (CPI) report released on Friday.
The Bureau attributed the rise in inflation to increased transportation costs and higher food prices.
On a year-on-year basis, the headline inflation rate was 6.55 percent points higher than the rate recorded in October 2023 (27.33 percent).
This indicates that the headline inflation rate increased in October 2024 compared to the same month in the preceding year.
On a month-on-month basis, the NBS further noted that the headline inflation rate in October 2024 was 2.64 percent, which was 0.12 percent higher than the rate recorded in September 2024 (2.52 percent).
This means that the rate of increase in the average price level in October 2024 was higher than the rate of increase in the average price level in September 2024.
According to the NBS, the food inflation rate in October 2024 was 39.16 percent on a year-on-year basis, 7.64 percent higher than the rate recorded in October 2023 (31.52 percent).
The rise in food inflation on a year-on-year basis was attributed to increases in the prices of the following items: Guinea Corn, Rice, Maize Grains, Rice, etc. (Bread and Cereals Class), Yam, Water Yam, Coco Yam, etc. (Potatoes, Yam & Other Tubers Class), Palm Oil, Vegetable Oil, etc. (Oil and Fats Class), and Milo Lipton, Bournvita, etc. (Coffee, Tea & Cocoa Class).
