The Monetary Policy Committee of the Central Bank of Nigeria has raised the Monetary Policy Rate, which benchmarks interest rates in the country, to 27.50 percent—up from 27.25 percent.
The CBN Governor, Olayemi Cardoso, announced the committee’s decision at a press conference on Tuesday after the panel’s 298th meeting in Abuja.
He explained that the committee increased the MPR by 25 basis points.
Cardoso also noted that the committee retained the asymmetric corridor at +500 and -100 basis points around the MPR.
Additionally, the MPC kept the Cash Reserve Ratio at 50 percent and the liquidity rate at 30 percent.
The CBN governor emphasized that raising the MPR aims to address ongoing price developments.
According to Cardoso, the MPC highlighted the need for optimal policy choices to combat rising inflation, stabilize the exchange rate, and appropriately anchor inflation expectations.
“The committee was particularly concerned that all three measures also inched up on a month-on-month basis, suggesting the persistence of price pressures with attendant adverse impact on income and welfare of citizens.
“Members, therefore, agreed unanimously to remain focused in addressing price developments,” Cardoso said.
He acknowledged food prices as a significant contributor to inflation but commended the Federal Government’s improved security efforts, particularly in the North East, which he said would likely boost food production.
“The committee also noted the role of rising energy prices on the general price level due to its impact on factors of production.
“The recent increase in the price of premium motor spirit (PMS) has also impacted the cost of production and distribution of food items and manufactured goods,” the CBN governor added.
Despite these challenges, Cardoso expressed optimism that full deregulation of the downstream petroleum sector would eliminate scarcity and stabilize prices in the short to medium term.
“Members thus reiterated the need to strongly forge ahead with the deepening collaboration between the monetary and fiscal authorities to ensure the achievement of our synchronized objectives of price stability and sustainable growth,” he said.
Cardoso also highlighted improvements in Nigeria’s external sector, citing increases in the current account surplus, enhanced remittances, and capital inflows, which have positively impacted external reserves.
The CBN governor concluded by affirming that key policy measures from both monetary and fiscal authorities are “yielding the desired outcomes.”
