The Central Bank of Nigeria (CBN) has raised the monetary policy rate (MPR) from 26.25% to 26.75% through its monetary policy committee.
The rate adjustment was announced by CBN Governor, Olayemi Cardoso, on Tuesday at the end of the committee’s 296th meeting in Abuja.
The development comes following Nigeria’s inflation rate hitting 34.19 per cent last week amid the continued surge of food prices.
Cardoso, while speaking at the media briefing, disclosed that members of the committee voted to increase the rate by 50 basis points to 26.75 per cent and adjust the asymmetric corridor to +500 and -100 basis points around the MPR.
According to him, the committee remains mindful of the effect of rising prices on households and businesses, and “is resolved to take necessary measures to bring inflation under control”.
“The committee re-emphasised its commitment to the bank’s price stability mandate, and remained optimistic that despite the June 2024 uptick in headline inflation, prices are expected to moderate in the near term,” Cardoso said.
“This is hinged on monetary policy, gaining further traction in addition to recent measures by the fiscal authority to address food inflation.
“In his consideration, the committee noted the persistence of food inflation, which continues to undermine price stability.
“It was observed that while monetary policy has been moderating aggregate demand, rising food and energy costs continue to exert upward pressure on price development.
“Prevailing insecurity in food-producing areas and high cost of transportation of farm produce are also contributing to this trend.
“Members are, therefore, not oblivious to the urgent benefits of addressing these challenges, as it will offer a sustainable solution to the persistent pressure on food prices,” Cardoso stated.
