During the recently concluded Monetary Policy Committee Meeting, the Central Bank of Nigeria (CBN) announced four significant decisions aimed at stabilizing the Naira.
CBN Governor Olayemi Cardoso revealed these decisions while addressing journalists at the conclusion of the 295th MPC Meeting held in Abuja.
Firstly, the MPC opted to raise the Monetary Policy Rate (interest rate) by 150 basis points, increasing it to 26.25 percent from the previous rate of 24.75 percent set in March 2024. This adjustment implies a rise in the cost of borrowing.
The decision was made in response to the mounting inflation, which surged to 33.69 percent in April.
Secondly, the MPC maintained the Cash Reserve Ratio at 45 percent, citing its importance in bolstering the solvency of the country’s banking system. Additionally, the Committee retained the Liquidity Ratio at 30 percent.
However, the Asymmetric Corridor remains unchanged at +100/-300.
The CBN expressed confidence that these tightening measures would contribute to lowering inflation, which the National Bureau of Statistics reported had increased to 33.69 percent in April from 33.20 percent in March.
Despite the CBN’s interventions, Nigeria’s foreign exchange market continues to witness fluctuations, with the Naira trading at N1468.99 per dollar in the official forex market on Monday.
