The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has raised the monetary policy rate (MRP) by 50 basis points – from 26.25 per cent to 26.75 per cent.
Governor of the Central Bank, Olayemi Cardoso, said the continuous hike in rates was based on Nigeria’s persistent hike in food and core inflation, calling on the fiscal authorities to immediately address inflationary pressures.
The apex bank also adjusted the asymmetric corridor around the MPR from +100/-300 to +500/-100 basis point
The MPC held the cash reserve ratio of Deposit Money Banks (DMBs) and the liquidity ratio constant.
The committee noted the persistent food inflation. It said the rising food and energy inflation have asserted much pressure on the inflation. Cardoso said the persistent nature of food crisis has exerted pressure on the prices of food.
It called for sustainable measures to ensure food supply to ensure food security.
The committee said it reviewed recent economic and financial developments and assess risks to the outlook to arrive at the decision to increase rates, which analysts say would further dampen economic growth with a significant effect on job creation.
Mr Cardoso said Nigeria has failed to diversify the economy, resulting in constant dependence on earnings from oil.
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