The Central Bank of Nigeria (CBN) has raised the monetary policy rate (MPR) from 27.25% to 27.50%, marking a key decision by the bank’s Monetary Policy Committee (MPC). The MPR serves as the benchmark interest rate for the country.

CBN Governor, Olayemi Cardoso, announced that the MPC maintained the asymmetric corridor around the MPR at +500 and -100 basis points. Additionally, the committee retained the cash reserve ratio (CRR) at 50% and the liquidity ratio at 30%.

Cardoso explained that the hike in the MPR is aimed at addressing rising prices and stabilizing inflation. He highlighted the committee’s focus on managing price pressures, which continue to affect the income and welfare of Nigerians.

“The committee noted that inflationary pressures remain persistent, with a month-on-month increase across key indicators,” Cardoso said. “This underscores the need for policy measures to stabilize prices, anchor inflation expectations, and maintain exchange rate stability.”

While food prices remain a significant driver of inflation, the MPC acknowledged the federal government’s efforts to improve security in the northeast, which is expected to boost agricultural productivity. However, rising energy costs, particularly the recent increase in the price of premium motor spirit (PMS), have continued to elevate production and distribution costs across various sectors.

Despite these challenges, Cardoso expressed optimism that the full deregulation of the downstream petroleum sector will eventually stabilize fuel prices and reduce scarcity, positively impacting the broader economy in the medium term.

The MPC also emphasized the importance of collaboration between monetary and fiscal authorities to achieve sustainable growth and price stability.

In addition, Cardoso highlighted improvements in Nigeria’s external sector, including a rise in the current account surplus, increased remittances, and higher capital inflows, all of which have bolstered the country’s external reserves.

“The committee is pleased with the progress being made as key policy measures by both monetary and fiscal authorities begin to deliver positive results,” he added.