The Monetary Policy Committee (MPC) unanimously decided to increase the Monetary Policy Rate (MPR) by 25 basis points, raising it from 27.25% to 27.50%. The Committee also chose to maintain the Cash Reserve Ratio (CRR) at 50% for Deposit Money Banks and 16% for Merchant Banks. Additionally, the Liquidity Ratio (LR) remains unchanged at 30%, and the Asymmetric Corridor is kept at +500/-100 basis points around the MPR.
The members of the MPC are committed to addressing price developments. They acknowledged that while rising food prices are a significant factor in inflation, efforts by the federal government to improve security, particularly in the northeast, are commendable and likely to boost food production.
The Committee also highlighted the impact of rising energy prices on general price levels, noting that these increases affect production costs. The recent hike in the price of premium motor spirit (PMS) has further influenced the cost of producing and distributing food and manufactured goods.
However, MPC member Cardoso expressed optimism that fully deregulating the downstream sector of the petroleum industry would eliminate scarcity and stabilize prices in the short to medium term. The Committee emphasized the importance of strong collaboration between monetary and fiscal authorities to achieve the goals of price stability and sustainable growth.
Furthermore, the Central Bank of Nigeria (CBN) Governor noted an improvement in the external sector, as evidenced by an increase in the current account surplus, enhanced remittances, and capital inflows, all of which have positively impacted external reserves. Cardoso added that key policy measures by both monetary and fiscal authorities are beginning to yield the desired outcomes.
