…….Hails Govt’s Fiscal Measures
The Monetary Policy Committee , at it’s first meeting of the year held on Tuesday took 4 critical decisions aimed at curbing the bullish inflationary trend which has become a feature of the Nigerian economy over the past few years.
The decisions include: raising the MPR from 18.75 to 22:75 per cent, an increase of 400 basis points, adjustment of the asymmetric corridor around the MPR to +100/-700 from +100/-300 basis points.
It also raised the Cash Reserve Ratio from 32.5 per cent to 45.0per cent while retaining the Liquidity Ratio at 30 per cent.
The Communique issued at the end of the meeting revealed that members leaned towards emplacing measures directed at easing the persistent inflationary pressures.
The Committee’s decisions were centered on the current inflationary and exchange rate pressures, projected inflation, and rising inflation expectations.
“Members were concerned about the persistent rise in the level of inflation and emphasized the Committee’s commitment to reverse the trend.”
“Members noted the decision to transit to an inflation targeting framework as essential to addressing the persistence of inflationary pressures in the economy and commended the fiscal authority for their invaluable support.”
“The Committee identified non-monetary factors driving inflation such as the persisting insecurityand infrastructural deficits and noted the roe of fisca policy in addressing these shortfalls, while reiterating the commitment of monetary policy support. In this regard, the Committee applauded fiscal policy initiatives towards reducing the cost of living for ordinary Nigerians, includingthe ongoing effortsto improve food supply and provide mass transit CNG buses to ease the cost of transportation; and the civil service reforms to improve the efficiency of governmentamongst others.
The Committee called for recapitalisation of banks to further strengthen their resilience against risks thereby providing greater stability in the sector and the entire economy.
The next meeting of the Committee is slated for March 25 and 26, 2024