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Following a two-day meeting, the bank’s Monetary Policy
Committee (MPC) agreed to increase the Monetary Policy Rate(MPR) for the third
straight time to rein in the country’s soaring inflation levels pegged at
33.69% in April 2024.
“The Monetary Policy Committee (MPC) of the Central Bank of
Nigeria (CBN) held its 295th meeting on the 20th and 21st of May 2024 to review
recent economic and financial developments and assess risks to the outlook,”
the CBN Governor Yemi Cardoso who is also the MPC chairman said on Tuesday.
“Decisions of the MPC. The committee’s decisions are as
follows: 1. Raise the MPR by 150 basis points to 26. 25 per cent from 24.75 per
cent.”
Cardoso, however, said the Cash Reserve Ratio (CRR) of
Deposit Money Banks (DMBS) was retained at 45 per cent. The MPC also put the
Asymmetric Corridor around the MPR at +100 and –300 basis points. It retained
the liquidity ratio at 30 per cent.
The CBN chief who admitted the rising inflation levels in
the country said the key focus of the MPC meeting was to achieve price
stability by using tools available to rein in inflation.
He said the inflation pressure is being driven largely by
food inflation, citing rising costs of transportation, infrastructure
challenges, insecurity, and exchange rate issues as some of the factors
affecting it.
Monday’s announcement comes amid soaring prices of
commodities and a rising cost of living.
Pushed majorly by the removal of fuel subsidy last year and
the floating of the naira, Nigerians are battling historic high inflation
levels.
Despite protests and pressures from labour unions, President
Bola Tinubu has repeatedly called for patience, expressing optimism that his
government’s reforms will yield fruit.
In a bid to combat the falling value of the naira, the CBN
in recent months targeted the operations of cryptocurrency exchange Binance.
That and other measures led to an appreciation of the currency. But the gains
appear to have stalled in recent weeks.