The Central Bank of Nigeria (CBN) has increased its Monetary Policy Rate (MPR) to 27.25% following the decision at Tuesday’s Monetary Policy Committee (MPC) meeting, chaired by CBN Governor Yemi Cardoso.
Cardoso explained that the hike aims to boost confidence among economic agents and help them plan for the medium to long term. Despite a slight decrease in headline inflation due to moderated food inflation, core inflation remains high, driven by rising energy prices. The MPC expressed concern about these inflationary pressures and emphasized collaboration with fiscal authorities to address them.
The committee also recognized the need to curb excess liquidity and manage foreign exchange demand pressures while acknowledging the growing fiscal deficits. However, Cardoso noted that the federal government has committed to avoiding monetary financing through “ways and means.”
Additionally, he praised the government’s efforts to stabilize food prices and expressed optimism that the operations of the Dangote Petroleum Refinery would help reduce transportation costs, thereby easing food price pressures in the short to medium term.