The Central Bank of Nigeria (CBN) maintained its hawkish stance at its 295th Monetary Policy Committee (MPC) meeting on May 20th-21st, 2024. The Monetary Policy Rate (MPR) was tightened further by 150bps to 26.25%. This decision is a strong signal of the apex bank’s commitment to curbing inflation and addressing FX pressures through contractionary monetary policies. All other policy tools, including the asymmetric corridor, cash reserve ratio (CRR), and liquidity ratio, were left unchanged.
In summary, the Committee decided to:
- Increase the MPR by 150bps to 26.25%.
- Maintain the Asymmetric Corridor at +100/-300 basis points around the MPR.
- Retain the CRR for commercial banks at 45%.
- Maintain the Liquidity Ratio at 30%.
We expect a further increase in the MPR by 50-100bps during the next MPC meeting in July 2024.
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