Monetary Policy
Yemi Cardoso, the Governor of the Central Bank of Nigeria, has committed to prioritizing stability in prices and exchange rates to foster sustainable economic growth and protect the welfare of Nigerians.
In pursuit of this goal and to bolster the economy, the CBN has raised the monetary policy rate (MPR) to 22.75% and the Cash Reserve Ratio (CRR) to 45% following the February 2024 MPC Meeting.
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria recently concluded its two-day meeting for February 2024, marking the first meeting of the year and the initial gathering under Governor Cardoso’s leadership. At this meeting, the MPC decided to increase the MPR by 400 basis points.
Key decisions made by the MPC include:
- Raising the MPR by 400 basis points to 22.75%
- Adjusting the asymmetric corridor to +100bps/-700bps (previously +100bps/-300bps)
- Increasing the CRR to 45.0% (previously 32.5%)
- Retaining the liquidity rate at 30.0%
These measures signify the MPC’s commitment to stabilizing the economy and promoting sustainable growth in Nigeria.
CBN Gov, Cardoso Outlines Monetary Policy Outlook For 2024
…Assures Nigerians of price, exchange rate stability
…Bank adopted Inflation Targeting Framework
During the 58th Annual Bankers’ Dinner in Lagos, Governor Olayemi Cardoso of the Central Bank of Nigeria (CBN) outlined the bank’s policy direction for 2024. He emphasized the importance of prioritizing stability in prices and exchange rates to promote sustainable economic growth and protect Nigerians’ well-being.
Cardoso acknowledged recent challenges in the effectiveness of the CBN’s monetary policy tools and pledged to address them. He highlighted the need for transparency and fair market practices, especially in international trade. Cardoso outlined plans to develop de-risking instruments, enhance payment services, and strengthen bank sustainability.
Looking ahead, the CBN aims to focus on orthodox monetary policy tools and adopt an inflation-targeting framework to enhance policy effectiveness. Cardoso expressed optimism in the CBN’s ability to achieve price stability, foster economic growth, and address banking sector concerns. The event underscored the importance of collaboration among various stakeholders in achieving financial stability and growth.
