The Central Bank of Nigeria (CBN), on Tuesday, retained the Monetary Policy Rate (MPR) at 27.5 percent.
CBN Governor Olayemi Cardoso, who disclosed this at the end of the 300th Monetary Policy Committee (MPC) meeting at the bank’s headquarters, in Abuja, explaines that the apex bank needed to study the global uncertainties before considering any movement.
According to him, “The Committee was unanimous in its decision to hold policy, and thus decided as follows: 1. Retain the NPR at 27.50%; 2. Retain the asymmetric corridor around the NPR at plus 500 to minus 100 basis points; 3. Retain the cash reserve ratio of deposit money
banks at 50% and merchant banks at 16% and 4. Retain the liquidity ratio at 30%.
He disclosed that the MPC noted improvements in some key indicators, especially the narrowed gap between the two foreign exchange windows, the positive net position of the foreign reserves as well as the easing fuel prices played roles in the decision to hold the MPR.
“The NPC noted the relative improvements in some key macroeconomic indicators, which are
expected to support the overall moderation in prices in the near to medium term.
“These include the progressive narrowing of the gap between the Nigeria Foreign Exchange Market and Bureau de Change BDC windows, the positive balance of payments position, and easing price of PMS.
“On the strength of these considerations, and driven by the continued uncertain policy environment exacerbated by ongoing global shocks, members weighed the available policy more comfortable.”
The CBN boss noted the progressive moderation in food inflation through government measures to increase food supply, as well as, stepping up the fight against insecurity, especially in farming communities and urged security agencies to sustain the momentum while government provides
necessary inputs to farmers to further boost food production.
He, however, acknowledged underlying inflationary pressures driven largely by high electricity prices, persistent foreign exchange demand pressure, and what he described as “other legacy structural factors.”
