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Nigeria’s central bank raises interest rate to 22.75 %

Published

10 months ago

February 28, 2024

The Central Bank of Nigeria (CBN), during its Monetary Policy Committee (MPC) meeting on Tuesday, raised its benchmark interest rate, the Monetary Policy Rate (MPR), by 400 basis points from 18.75 percent to 22.75 percent.

The CBN also increased the cash reserve ratio (CRR) of banks to 45% from 32% and modified the Asymmetric Corridor around the MPR to +100/-700 from +100/-300. Nonetheless, the MPC kept the liquidity ratio at thirty percent.

According to Cardoso, the decision to abruptly increase the MPR was made in order to address the system’s high rate of inflation and substantial liquidity, as the inflation rate surged further in January to hit 29.90% annually and its January 2024 Consumer Price Index (CPI) report, which also noted that food inflation rose to 35.41 percent during that time from 33.93 percent in December 2023.

He said, “The committee’s decisions were centred on inflationary and exchange pressures, projected inflation and rising inflation expectations.

“Members were concerned about the persistent rise in the level of inflation and emphasised their commitment to reverse the trend, as the balance of risks leans towards rising inflation.

“The committee, however, acknowledged the trade-off between the pursuit of output growth and taming inflation but was convinced that an enduring output expansion is possible only in an environment of stable economics.

“The balance of the argument was in favour of a considerable rate hike to drive down inflation substantially.”

Financial commentators have predicted that the MPR’s decision will result in increased foreign investment inflows, an appreciation of the naira, and higher interest rates in the fixed income markets.

There is a chance that the rise in MPR may result in higher borrowing costs and less financing to the real sector, which might lead to slower growth in the industrial and agricultural sectors.

Related Topics:Featured Interest rate Nigeria Olayemi Cardoso

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Moroccan annual inflation rises to 0.8% in November

Published

24 minutes ago

December 21, 2024

Ifeoluwa Dada

Morocco’s statistics office has confirmed that the country’s annual inflation rate, as determined by the consumer price index, increased from 0.7% in October to 0.8% in November.

Monthly, consumer prices decreased by 0.2% from October.

The primary driver of inflation, food costs, grew by 0.8% compared to the previous year, while non-food inflation climbed by 0.7%. Core inflation, which does not include more erratic items like food, increased 2.6% annually and 0.2% monthly.

According to the central bank, inflation is expected to average 1% this year, down from 6.1% last year.

Despite the Al-Haouz earthquake, a spike in inflation, and worldwide economic challenges, Morocco’s GDP grew by 3.4% in 2023.

A recovery in tourism, robust industrial exports, and rising private consumption—all bolstered by prudent macroeconomic policies—were the main drivers of growth.

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Nigeria’s $42bn foreign reserves enough for 9 months’ imports— Central Bank

Published

1 day ago

December 20, 2024

Ifeoluwa Dada

According to Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), the nation’s $42.01 billion in foreign reserves can cover imports of goods and services for almost nine months.

Cardoso promised Nigerians improved economic fortunes in 2025 while addressing the Senate Committee on Banking, Insurance, and Other Financial Institutions yesterday in Abuja at the presentation of the performance index report.

Cardoso stated: “External Reserves rose from $ 38.35 billion it was on September 30, 2024, to $ 42.01 billion as of December 12, 2024”.

He clarified that third-party receipts in Q3 2024 and revenues from taxes connected to crude oil were the main drivers of the rise in foreign reserves during the specified time.

“We saw remarkable improvements in our trade balance and maintained a current account surplus,” he added.

“Our external reserves level can finance over 9.09 months of import of goods and services or 13.91 months only, higher than the international benchmark of 3.0 months and a robust buffer against shocks”.

On cash shortage, the CBN boss reiterated the N150 million fine against any branch of banks caught illegally distributing new Naira notes to currency hawkers and unscrupulous elements and said the Nigerian economy will improve in 2025 through policies and measures.

He predicted a stronger economic future: “Despite our economy’s challenges, there are clear reasons for optimism.

“The gradual stabilization of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”