The Central Bank of Nigeria (CBN) has again increased its Monetary Policy Rate (MPR), raising it to 27.25%.
The decision was made on Tuesday during the Monetary Policy Committee (MPC) meeting chaired by CBN Governor, Yemi Cardoso. Cardoso noted that the move will help improve confidence, enabling economic agents to plan in the medium to long term.
He also mentioned that more efforts are needed to achieve the bank’s price stability mandate. The committee expressed concerns about the persistence of inflationary pressures, especially in core inflation driven by rising energy prices.
They emphasized the need for collaboration with the fiscal authority to address the upward pressure on energy prices and to manage excess liquidity in the system, as well as foreign exchange demand pressures.
The MPC also expressed worries about fiscal deficits but acknowledged the government’s commitment to not resort to monetary financing.
Additionally, they commended the government’s efforts to stabilize food prices and expressed optimism regarding the expected impact of lifting refined petroleum products from Dangote Petroleum Refinery on transportation costs, food prices, foreign exchange demand, external reserve, and the overall balance of payment position.
It’s worth noting that in July 2024, the CBN raised its Monetary Policy Rate (MPR) by 800 basis points to 26.75 percent, up from 13 percent in May 2022.
