(Greenwich Merchant Bank): At the end of its 290th meeting, the Monetary Policy Committee (MPC) of the Central Bank Nigeria (CBN) voted to increase the benchmark interest rate for by 50bps to 18% from the 17.50% it was in January 2023.
With this, it has increased the MPR for the sixth consecutive time. In addition, the other police rates were left unchanged as stated below;
- The Asymmetric corridor retained at +100/-700bps around MPR.
- The Cash Reserve Ratio (CRR) was retained at 32.50%.
- The Liquidity Ratio held at 30.00%
Some of the concerns raised by the committee are; Inflation rate has been one of the primary challenges, although other macroeconomic indicators seem to be moving in the right direction.
The upward risks to inflation rate, in the mid-to-near term are the expected subsidy removal, expected increase in food prices given the recorded flooding in some food basket states of Nigeria, increasing energy prices, and unabated exchange rate pressures.
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.