The monetary policy committee (MPC) of the Central Bank of Nigeria (CBN) has retained the monetary policy rate (MPR), which benchmarks interest rates in the country, at 27.50 percent.
Olayemi Cardoso, CBN’s governor, announced the committee’s decision at a press conference on Thursday after the committee’s 299th meeting in Abuja.
Since the monetary policy committee started raising the MPR in May 2022, the group has increased the interest rate 15 times.
CBN’s decision to hold the MPR followed a report by the National Bureau of Statistics (NBS) on Tuesday that Nigeria’s inflation rate dropped to 24.48 percent from 34.8 percent, after rebasing the consumer index price (CPI).
Speaking at the media briefing, Cardoso said the committee members unanimously voted to retain the rate at 27.50 percent.
The committee retained the cash reserve ratio (CRR) at 50 percent, and liquidity ratio at 30 percent.
He also said the committee noted with satisfaction recent macroeconomic developments which are expected to positively impact price dynamics in the near to medium term.
“These include the stability in the foreign exchange market with the resultant appreciation of the exchange rate and the gradual moderation in the price of PMS,” Cardoso said.
“Members, however, were not oblivious to the risk of persisting inflationary pressures driven largely by food prices.
“The committee noted the recent revision of the Consumer Price Index, CPI, by the National Bureau of Statistics, NBS, which reviewed the weights of items in the consumption basket to reflect current consumption patterns.
“The committee further noted that as the federal government continues to improve security in food-producing communities, supported by other measures to enhance food supply, food prices are expected to continue to moderate.”
Cardoso also said the committee called for continuous strengthening of collaboration between the monetary and fiscal sectors to achieve the mutually beneficial objectives of price stability and sustainable growth.
“The committee highlighted the benefits of the improvements in the external sector to exchange rate stability, including the convergence of rates between the Nigeria foreign exchange market and the bureau de change,” he added.
“The committee also urged the bank (CBN) not to relent in its efforts to boost market liquidity.”
He said the MPC urged CBN not to relent on its keen surveillance of the banking system, especially at a time of significant exogenous and endogenous headwinds.
Cardoso said the committee acknowledged the various policies by CBN aimed at anchoring inflation expectations, easing exchange rate pressures, deepening financial inclusion and improving the transmission mechanism of monetary policy.(The Cable)
