The CBN Governor, Mr. Olayemi Cardoso, disclosed this at the end of the 298th Monetary Policy Committee, MPC meeting in Abuja.
According to him “The committee was unanimous in its decision to further tighten the policy and thus decided as follows: Raise the MPR by 25 basis points to 27. 50 percent from 27. 25 percent.
“Retain the Asymmetric Corridor around the MPR at +500 / -100 basis points. Retain the Cash Reserve Ratio, CRR of Deposit Money Banks at 50 percent and Merchant Banks at 16 percent; and retain the Liquidity Ratio at 30 percent.”
Why we raised interest rate again
Dr. Cardoso said the committee decided to further hike the rate because of the renewed inflationary pressures as the headline, food and core measures rose Year-on-Year last month, citing the latest report of the National Bureau of Statistics (NBS).
“The committee was particularly concerned that all three measures inched up on a month-to-month basis. Suggesting persistent price pressures with attendant adverse impact on income and welfare of citizens. Members therefore agreed unanimously to remain focused in addressing price developments,” he emphasized.
The CBN boss was upbeat on the positive outcomes of CBN policies, as according to him, the increased remittances stood out as a clear indication that his administration’s policies were achieving desired results.
His words, “The committee noted the improvement in the external sector, reflected in the Current Account surplus, enhanced remittance and capital inflows which have impacted the External Reserves positively. These, therefore, suggest that key policy measures by both the monetary and fiscal authorities are yielding the desired outcomes.”
Cardoso disclosed that the nation’s External Reserves stood at $40. 88 billion as at November 26, 2024, up from $40. 06 billion in as of the end of October 2024.
The Governor however, expressed concern over the persisting exchange rate pressure, reflecting continued high demand in the market, with the MPC urging the bank to explore measures to boost market liquidity.
He added that the Naira had been stable since June and that it was an important parameter for a stable, growing economy, adding, “If you measure stability between June and now, it has been stable.”
Mr. Cardoso said that there would normally be a time-lag between policy implementation and outcomes and that he was optimistic that greater results would be witnessed in the first quarter of next year.
Cardoso said that his team was working hard to ensure that Nigeria was removed from the Grey List of the Financial Action Task Force, latest by early next year.
He said that the removal of Nigeria from that list was key to the success of the anticipated heavy capital flows into Nigeria, through Diaspora Remittances and other funds coming into the country.
The Governor pledged to announce some initiatives to address the problem of cash shortages across the country, especially, with the yuletide approaching.
He was reacting to reports that accessing cash was already becoming difficult in many parts of the country, saying, “we are ensuring that all the Deposit Money Banks get the cash that they require and that there are no gaps. We are doing spot checks. And providing cash buffers during this yuletide season. We are concerned. We don’t want people to suffer unduly.”
