The Central Bank of Nigeria’s Monetary Policy Committee (MPC) recently convened to address the country’s economic challenges amidst a concerning surge in inflation. During the bi-monthly meeting, the committee made significant decisions aimed at stabilising the economy and curbing inflationary pressures.
One of the key decisions made by the MPC was to increase the monetary policy rate (MPR) by 400 basis points, raising it from 18.75 percent to 22.75 percent. This move serves as a benchmark for interest rates across the country. Additionally, the committee decided to raise the cash reserve ratio (CRR) from 32.5 percent to 45 percent, while maintaining the liquidity rate at 30 percent.
These decisions were prompted by the alarming rise in Nigeria’s inflation rate, which climbed to 31.7 percent in February 2024, up from 29.9 percent in the previous month. Notably, food inflation also experienced a substantial surge, reaching 37.92 percent during the same period, according to data from the National Bureau of Statistics.
The MPC plays a crucial role in the central bank’s mandate of ensuring price stability. In light of the current economic conditions, the committee deemed it necessary to take proactive measures to address inflation and stabilize the economy. By adjusting key monetary policy parameters, the MPC aims to mitigate the adverse effects of inflation and promote sustainable economic growth.
