A couple of hours ago, the Central Bank of Nigeria (CBN) raised its monetary policy rate (MPR), which benchmarks interest rates, by 100 basis points (bps) to 17.5%. This rate is the highest in over two decades.

It is also the first CBN decision this year, following the conclusion of its two-day maiden monetary policy committee (MPC) meeting for 2023, where all 12 members unanimously voted for the hike. One member voted to raise by 150 basis points (bps), four suggested 50bps and seven100bps.

However, the CBN MPC did not change other monetary parameters like the asymmetric corridor of +100/-700 basis points (bps) around the MPR, the cash reserve ratio (CRR) of 32.5%, and the 30% liquidity ratio.

Stears expected the CBN to double down on rate hikes this year to tame high inflation, and the MPC’s decision spotlights this commitment to ensure price and exchange rate stability.

Still, this