The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) will meet today to evaluate the impact of its massive rate hike in the previous meeting and to determine the direction of monetary policy in the future. Discussions are expected to focus majorly on persistent inflationary pressures at a 26-year high of 31.70 percent in February despite the central bank pursuing a contractionary policy regime. The committee will also give attention to current exchange rate volatility which has shown a bit of moderation in recent weeks. Analysts have predicted a hold on key policy rates, particularly the Monetary Policy Rate (MPR), the benchmark interest rate.
During its 27 February 2024, meeting, the first to be superintended by Cardoso, the apex bank jolted the markets and beat analysts’ expectations when in one fell swoop, it raised the Monetary Policy Rate (MPR) by a whopping 400- basis points to 22.75 percent from 18.75 percent at a period of biting economic hardship occasioned mainly by the removal of fuel subsidy and floating of the Naira. The bank also adjusted the asymmetric corridor around the MPR to +100/-700 basis points from +100/-300 basis points. The central bank further raised the Cash Reserve Requirement (CRR) to 45 percent from 32.5 percent and retained the Liquidity Ratio at 30 percent.
