The Central Bank of Nigeria (CBN) has once again increased the Monetary Policy Rate (MPR) by 50 basis points, raising it from 26.25% to 26.75% in response to soaring inflation and escalating food prices. CBN Governor Olayemi Cardoso announced this adjustment following the apex bank’s 296th Monetary Policy Committee (MPC) meeting in Abuja on Tuesday.
The MPC also modified the asymmetric corridor around the MPR from +100/-300 basis points to +500/-100 basis points. Additionally, it retained the Cash Reserve Ratio (CRR) for deposit money banks at 45% and for merchant banks at 14%, as well as the Liquidity Ratio at 30%.
Cardoso emphasized that the committee is aware of the impact of rising prices on households and businesses and is committed to taking necessary actions to control inflation. He noted that despite the inflation uptick in June 2024, prices are expected to stabilize in the near term as monetary policy measures take effect, along with further actions by the fiscal authority to address food inflation.
The MPC expressed concern over persistent food inflation and rising energy costs, which continue to undermine price stability. The next MPC meeting is scheduled for September 23 and 24.
Nigeria is facing one of its worst economic crises in recent times, characterized by rising living and energy costs, driven by the government’s removal of the petrol subsidy and unification of the foreign exchange windows in May 2023. The country's inflation reached a record high in June, hitting 34.19%, according to the National Bureau of Statistics (NBS). Food inflation also surged to 40.87% year-on-year in June 2024, compared to 40.66% in May 2024, and 25.25% in June 2023.
Despite palliative measures rolled out by President Bola Tinubu's administration and governors of the 36 states, Nigerians continue to suffer from the severe impact of inflation as the prices of food commodities and basic products increase uncontrollably.
