The Digest:
The Central Bank of Nigeria (CBN) decided to maintain its Monetary Policy Rate (MPR) at 27.5%, despite inflation easing for the third consecutive month. Governor Olayemi Cardoso highlighted key risks ahead as inflationary pressures persist.
Following a two-day meeting, the Monetary Policy Committee (MPC) voted unanimously to hold the MPR steady, aiming to curb inflation while supporting economic stability. Despite a decrease in headline inflation to 22.22%, core inflation remains elevated. Rising food prices and global uncertainties are key factors in this delicate balance.
Key Points:
- MPR Maintained: No change in rate despite easing inflation
- Inflation Declines: Headline inflation drops to 22.22% in June
- Core Inflation Up: Core inflation rises to 22.76%, showing continued cost pressures
- Energy Prices Impact: Lower cooking gas and diesel prices helped reduce inflation
- Global Uncertainties: Geopolitical risks threaten to inflate import costs
- Financial System: Banking sector remains stable with improved capital requirements
- Reserves Strength: External reserves hit $40.11 billion, covering 9.5 months of imports
CBN's focus remains on disinflation, yet the path to price stability remains fraught with challenges. Maintaining cautious optimism, Cardoso stressed the need for continued monitoring of both domestic and international factors.
Sources: BusinessDay, Central Bank of Nigeria
