In a recent move, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has increased the interest rate by 50 basis points, raising it from 26.25 percent to 26.75 percent.
Additionally, the committee adjusted the symmetric corridor around the MPR from +100 and -300 to +500 and -100, while retaining the Cash Reserve Ratio for deposit money banks at 45% and for merchant banks at 14%.
Governor Ilayemi Cardoso of the CBN expressed optimism about price moderation in the near term, despite the June 2024 headline inflation. He explained that the committee’s decision was based on expectations of further traction in monetary policy, supported by recent fiscal measures to address food inflation.
The committee also highlighted the ongoing issue of food inflation, which continues to undermine price stability. They noted that while monetary policy has been effective in moderating aggregate demand, rising food and energy costs are still putting upward pressure on prices.
