The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has unanimously decided to keep all other parameters on hold after a review of recent economic and financial developments in the country as well as assessed the risks to the outlook for 2025.
The Central Bank of Nigeria (CBN), Governor, Mr. Olayemi Cardoso announced this on Thursday at a press briefing in Abuja, after the 299th MPC meeting, the first in 2025.
Mr. Cardoso said the CBN would continue with the orthodox monetary policies it has been pursuing which has manifested in positive outcomes, pledging to stay the course while being vigilant.
“We believe that inflation has been too high for too long. Our objectives, in the medium to long term, is to ensure that we are able to bring it down from double to single digit,” Mr. Cardoso assured.
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Cardoso added that inflation is trending down, and it’s looking positive.
He said, the MPC retained the Monetary Policy Rate (MPR) at 27.50 percent, and maintained the asymmetric corridor around the MPR at +500/-100 basis points.
Also, the MPC retained the Cash Reserve Ratio (CRR) of Deposit Money Banks at 50.00 percent, Merchant Banks at 16 percent, and Liquidity Ratio (LR) at 30.00 percent.
The Governor pointed out that the Monetary Policy Committee noted with satisfaction recent
macroeconomic developments which are expected to positively impact price dynamics in the near to medium term.
These, he said, include the stability in the foreign exchange market with the resultant appreciation of the exchange rate and the gradual moderation in the price of Premium Motor Spirit (PMS).
However, Mr. Cardoso stated that members were not oblivious to the risk of persisting inflationary pressures driven largely by food prices and that the Committee noted the recent rebasing of the
Consumer Price Index (CPI) by the National Bureau of Statistics (NBS) which reviewed the weights of items in the consumption basket to reflect current consumption patterns.
He said, “The Committee further noted that as the Federal Government continues to improve security in food-producing communities, supported by other measures to enhance food supply, food prices are expected to continue to moderate”.
Members reiterated the benefits of increased collaboration between the monetary and fiscal authorities, as demonstrated at the recently concluded Monetary Policy Forum organized by the Bank.
The MPC thus urged the continued strengthening of this collaboration to achieve the mutually beneficial objectives of price stability and sustainable growth.
The Committee highlighted the benefits of the improvements in the external sector to exchange rate stability, including the convergence of rates between the Nigeria Foreign Exchange Market (NFEM) and the Bureau de Change (BDC) and urged the Bank not to relent in its effort to boost market liquidity.
In this regard, the Committee acknowledged recent measures introduced by the Bank, such as the Electronic Foreign Exchange Matching System (B-Match)
and the Nigeria Foreign Exchange Code, to foster transparency, ethics and credibility in the market.
Cardoso stressed that the MPC is, thus, of the view that following major policy measures undertaken by the monetary and fiscal authorities, the flow of foreign direct and portfolio investments as well as diaspora remittances are expected to increase as investor and stakeholder confidence improves.
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