The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR) at 27.50 per cent for the second consecutive time this year.
Briefing journalists after the meeting of the MPC on Tuesday in Abuja, the Governor of the CBN, Mr. Olayemi Olayemi said: “The Committee was unanimous in its decision to hold policy and thus decided as follows: Retain the MPR at 27.50 per cent.”
He explaining that the pause would enable members to better understand near-term developments in the economy.
“With this move, the CBN retained the asymmetric corridor around the MPR at +500/-100 basis points, the Cash Reserve Ratio of Deposit Money Banks at 50.00 per cent, and that of Merchant Banks at 16.00 per cent, while keeping the Liquidity Ratio unchanged at 30.00 per cent,” he said.
According to him, the MPC based its decision on recent improvements in macroeconomic indicators.
With the inflation rate for April, pegged at 23.71 per cent from 24.23% in the previous month and Food inflation, the largest component of the inflation basket, remained elevated, but moderated to 21.26 per cent from 21.79 per cent in March, mainly on account of prices of some items such as maize, wheat, yam and wheat, Cardoso commended the Nigerian Government for implementing measures to increase food supply, as well as stepping up the fight against insecurity, especially in farming communities.
“The MPC encourages security agencies to sustain the momentum while the government provides necessary protection to farmers to further boost local food production,” he said.
He said that the committee, however, acknowledged underlying inflationary pressures driven by high electricity prices, persistent foreign exchange demand pressure, and other legacy structure factors.
The MPC also noted new policies introduced by the Nigerian Government to boost local production, reduce foreign exchange demand pressure, and lessen the pass-through of higher rates to domestic prices.
“Given the relative stability in the foreign exchange market, members urge the bank to sustain the implementation of the ongoing reforms to further boost the economy,” Cardoso said.
Cardoso also noted concerns about declining crude oil prices, which could threaten fiscal revenues.
“The Committee expressed concerns about the recent decline in crude oil prices, attributable to increased production by non-OPEC members as well as uncertainties associated with U.S. trade policy, which present new challenges for fiscal receipts and budget implementation,” he said.
The MPC commended the relative stability in the banking sector and called on the apex bank to sustain effective oversight amid the ongoing recapitalisation exercise.
“Members reaffirmed their commitment to prioritise policies targeted at anchoring inflation expectations and easing exchange rate pressure,” the governor added.
The next MPC meeting is scheduled for July 21 and 22, 2025.
GIK/APA