What Is the MPC and Monetary Policy Rate Explained

The Monetary Policy Committee (MPC) is the CBN body that meets through the year to set the Monetary Policy Rate (MPR) — the benchmark interest rate that anchors borrowing costs across the economy and shapes the exchange rate.

How it works

• The MPC meets — to weigh inflation, growth and the naira.
• It sets the MPR — up to cool inflation and defend the naira, down to support growth.
• Banks follow — loan and deposit rates move with the MPR.

Why it moves the naira

A higher MPR can attract investors seeking yield and support the naira, but it also raises the cost of loans — the trade-off at the heart of interest rates and the naira. The MPC’s decisions are set by the CBN, and their effect is explained in why the rate changes.