The Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) has raised the Monetary Policy Rate (MPR), from 26.75 percent to 27.25 percent.
CBN’s Governor, Olayemi Cardoso, announced the 50 basis points increase at a press conference on Tuesday after the Committee’s 297th meeting in Abuja.
The MPR increase which benchmarks interest rates, Cardoso said, was to further tame inflation.
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On September 16, the National Bureau of Statistics (NBS) said Nigeria’s inflation rate declined to 32.15 percent in August — the second time in 2024.
Also, the CBN Governor said the committee retained the asymmetric corridor at +500 and -100 basis points around the MPR.
He said the committee also increased the cash reserve ratio (CRR) from 45 percent to 50 percent, while retaining the liquidity rate at 30 percent.
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Cardoso said the MPC agreed to increase monitoring of future releases with a view to addressing its effect on price developments.
The Committee, he said, noticed the relative stability and convergence in the exchange rate across the various market segments resulting from the bank’s tight monetary policy stance.
“The committee was, however, unanimous in recognising that a lot more is required to actualise the bank’s price stability mandate.
“The MPC noted that even though headline inflation trended downwards due to a moderation in food inflation, core inflation has remained elevated, driven primarily by rising energy prices.
“The uptrend poses severe concerns to members as it clearly indicates the persistence of inflationary pressures. Members thus reiterated the need to work in close collaboration with the fiscal authority to address the current upward pressure on energy prices.
“The MPC noted the continued growth in money supply, recognising the need to curtail excess liquidity in the system as well as address foreign exchange demand pressures,” he said.
