By Ajibola Olaide, JKNMedia Reporter
THE CENTRAL Bank of Nigeria (CBN) increased the Monetary Policy Rate (MPR) to 26.75 percent from 26.25 percent.
This decision aims to address the surging inflation in the country.
Governor Olayemi Cardoso announced the new rate after the committee’s 296th meeting in Abuja.
Nigeria’s inflation rate recently climbed to 34.19 percent, driven by rising food prices.
The MPR serves as the baseline interest rate in Nigeria, influencing all other interest rates in the economy.
The committee decided to hike the rate by 50 basis points and adjusted the asymmetric corridor to +500 and -100 basis points around the MPR.
The cash reserve ratio (CRR) remains at 45 percent, and the liquidity ratio at 30 percent.
Cardoso emphasized that the committee is aware of the impact of rising prices on households and businesses.
He assured that the CBN is committed to taking necessary measures to control inflation.
The committee stressed its dedication to price stability. Despite the recent increase in headline inflation, it expects prices to stabilize soon, driven by ongoing monetary policies and recent fiscal measures to combat food inflation.
Cardoso noted that persistent food inflation undermines price stability.
While monetary policies have moderated aggregate demand, rising food and energy costs continue to drive prices up.
Insecurity in food-producing areas and high transportation costs are also contributing factors.
The committee highlighted the urgent need to address these challenges to achieve a sustainable solution to rising food prices.
It suggested monitoring farming activities to address the food supply deficit and moderate food prices in the Nigerian market.
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This is very disheartening. Though the CBN is swimming against a heavy tide, this is ill timed and not good for our ailing economy. They need better eggheads there. But can the CBN succeed without corresponding economic policies and fiscal discipline? NO
On this, we know the Central Bank of Nigeria faces significant challenges, and while better expertise could help, it can’t succeed without comprehensive economic policies and fiscal discipline. On the other hand, it could be pleasing its masters. Just saying.