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Assures cash flow at Yuletide
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Reiterates commitment to inflation fight, FX stability, financial inclusion
From Adanna Nnamani, Abuja
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has raised the Monetary Policy Rate (MPR) by 25 basis points to 27.50%, citing persistent inflationary pressures.
CBN Governor Olayemi Cardoso announced this at a press briefing on Tuesday in Abuja following the 298th MPC meeting.
He noted that the Asymmetric Corridor remains at +500/-100 basis points, with the Cash Reserve Ratio (CRR) at 50% for deposit money banks and 16% for merchant banks. The Liquidity Ratio was also maintained at 30%.
The apex bank flagged rising inflation as a key concern, with headline inflation climbing to 33.88% year-on-year in October 2024, up from 32.70% in September.
“The committee was particularly concerned that all three measures also inched up on a month-on-month basis, suggesting the persistence of price pressures with attendant adverse impacts on income and welfare of citizens. Members, therefore, agreed unanimously to remain focused on addressing price developments. While food prices remain a key contributor to the uptick, members commended the federal government’s efforts to improve security in the northeast, which could enhance food production,” Cardoso said.
He also highlighted the impact of rising energy prices on production costs and overall price levels.
Ahead of the festive season, Cardoso addressed concerns about cash shortages, assuring that the CBN is monitoring the situation closely and ensuring adequate cash supply to banks. He hinted at potential ad hoc measures to meet increased holiday demand.
Reaffirming the CBN’s commitment to combating inflation and stabilising foreign exchange, Cardoso urged patience, noting that monetary tightening measures take time to yield results. He projected significant progress by the first quarter of 2025, with ongoing collaborations to address structural issues like supply disruptions and infrastructure deficits.
On the naira’s exchange rate, Cardoso acknowledged the rise in foreign reserves to $40.8 billion and increased diaspora remittances, now at $611 million. He attributed these improvements to deliberate policy actions, including removing remittance channel bottlenecks.
Cardoso stressed the focus on currency stability rather than value, explaining that the naira’s strength depends on economic fundamentals like demand, supply, and the balance of payments. He encouraged reduced reliance on foreign goods, emphasising local production as a means to strengthen the naira over time.
Reflecting on recent engagements with Nigerians in the diaspora during the World Bank and IMF meetings, Cardoso announced the launch of the Non-Resident Account Program in December 2024. The program aims to simplify account-opening processes for Nigerians abroad, enhancing remittance flows and formal financial engagement.
Cardoso also reported progress in financial inclusion, which now covers approximately 95% of the adult population. He emphasised the importance of public-private partnerships to sustain momentum, particularly in reaching underserved groups such as women, youth, and micro, small, and medium enterprises (MSMEs). “These sectors, if properly energised, will contribute significantly to economic growth,” he said.
On Nigeria’s continued presence on the Financial Action Task Force (FATF) grey list, Cardoso reaffirmed the CBN’s commitment to strengthening anti-money laundering frameworks. He expressed optimism about Nigeria’s removal from the grey list by the second quarter of 2025, citing ongoing collaboration with international regulators and local financial institutions.