The Central Bank of Nigeria has raised the interest rate to a record 22.75 percent from 18.75 percent, a measure the bank officials hope would help stem rising inflation figures.
CBN governor, Yemi Cardoso disclosed this while addressing news reporters in Abuja Tuesday after a meeting of Apex Bank’s Monetary Policy Committee.
“All 12 members of the committee decided to further tighten monetary policy by raising the MPR by 400 basis points to 22.75 per cent from 18.75 per cent. Adjust the asymmetric corridor around the MPR to +100 to -700 from plus 100 to -300 basis points,” Mr. Cardoso said
“The committee also raised the cash reserve ratio from 32.5 per cent to 45 per cent while retaining the liquidity ratio at 30 per cent.”
The CBN’s move is divergent from President Bola Tinubu’s wish of having lower interest rates as a way of attracting investments and consumer purchasing power.
Meanwhile the CBN has resumed the sale of $20,000 to each Bureau De Change (BDC) operator in the country.
A statement signed by the CBN director of trade and exchange department, Dr Hassan Mahmud, said: “Following the ongoing reforms in the foreign exchange market, aimed at achieving an appropriate market-determined exchange rate for the Naira, the Central Bank of Nigeria (CBN) has observed the continued price distortions at the retail end of the market, which is feeding into the parallel market and further widening the exchange rate premium.
“To this end, the CBN has approved the sale of foreign exchange to eligible Bureau De Change (BDCs) to meet the demand for invisible transactions. The sum of $20,000 is to be sold to each BDC at the rate of N1,301/$- (representing the lower band rate of executed spot transactions at NAFEM for the previous trading day, as at today, 27th February 2024).
“All BDCs are allowed to sell to end-users at a margin NOT MORE THAN one percent (1%) above the purchase rate from CBN.
“All eligible BDCs are directed to make the Naira payment to the designated CBN Foreign Currency Deposit Naira Accounts and submit confirmation of payment, with other necessary documentation, for disbursement at the appropriate CBN Branches ABUJA, AWKA, LAGOS and KANO).”
