The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) yesterday resolved to raise the Monetary Policy Rate (MPR), the benchmark interest rate by 200 basis points to 24.75 percent, from 22.75 percent. The committee also reversed the asymmetric corridor around the MPR from +100/-700 basis points to +100/-300 basis points. Also, while it retained the Cash Reserve Ratio (CRR) of deposit money banks (DMBs) at 45.0 percent, the central bank however, jerked up the CRR for Merchant Banks (MBs) from 10 percent to 14 percent and left the Liquidity Ratio (LR) unchanged at 30.0 percent.
The MPC decision came just as the naira appreciated on the parallel market yesterday to close at N1,350/$1, compared to N1,400/$1 which closed on Monday, 25 March. On the official Nigerian Autonomous Foreign Exchange (NAFEM) window, the naira appreciated by N25.09 to close at N1,382.95/$1, compared to N1,408.04/$1 on Monday. Daily foreign exchange turnover also increased by 10.73 percent to $245.58 million from $221.80 million on Monday. Addressing journalists at the end of a two-day meeting of the MPC in Abuja, CBN Governor, Olayemi Cardoso, said the decisions of the committee further underlined the urgency on the part of the apex bank to, “bring inflation under control to ensure that the purchasing power of ordinary Nigerians is restored in the short to medium term.”
