The Monetary Policy Rate (MPR) of the Central Bank of Nigeria (CBN) has been increased once more, now standing at 27.25%.

The choice was decided on Tuesday at the Monetary Policy Committee (MPC) meeting, which Yemi Cardoso, the governor of the CBN, presided over.

According to Cardoso, the action will boost confidence, allowing economic agents to make medium- to long-term plans.

He said, “But the committee unanimously acknowledged that much more is needed to actualise the bank’s price stability mandate.”

The MPC observed that while food inflation has moderated, leading to a decline in headline inflation, core inflation has remained high, mainly due to increased energy prices.

Members are gravely concerned about the upswing because it makes it abundantly evident that inflationary pressures are still present. Members reaffirmed the necessity of closely collaborating with the fiscal authorities in order to tackle the increased pressure on energy costs that is currently in place.

“The MPC acknowledged the need to reduce excess liquidity in the system and address pressures on foreign exchange demand, while also noting the money supply’s continuous growth.”

According to Cardoso, the fiscal deficits were a concern for the MPC.

He added, nevertheless, that the federal government has promised not to use financial financing through other means.

The rising level of fiscal deficit worried the members as well, but he pointed out that the fiscal authority had promised not to use monetary financing through other means.

Cardoso also praised the federal government for its efforts to keep food costs stable.

“The lifting of refined petroleum products from Dangote Petroleum Refinery will moderate transportation costs and significantly support the easing of food price pressures in the short to medium term,” the committee expressed hope, according to him.

This is also likely to lower foreign exchange demand for importation of refined petroleum products, with a positive spillover on external reserve and improvement in the overall balance of payment position,” he said.

Remember that the Monetary Policy Rate (MPR) of the CBN was increased from 13 percent in May 2022 to 26.75 percent in July 2024, a rise of 800 basis points.