The Monetary Policy Committee of the CBN will meet for the second time this year on the 25th and 26th of March 2024. This was announced in a notice on the CBN website assessed by Nairametrics.
The 294th MPC meeting is coming exactly one month after the previous MPC meeting which held on February 26 and 27.
During that meeting, the committee voted to hike interest rates by 400 basis points, taking the Monetary Policy Rate from 18.75% to 22.75%.
Other decisions taken during the last MPC meeting include adjusting the asymmetric corridor around the MPR to +100/-700 from +100/-300 basis points. And raising the Cash Reserve Ratio from 32.5% to 45.0%.
Despite the MPR hike, Nigeria’s inflation rate for February 2024 hit a new high of 31.70%, while month-on-month, the headline inflation figure increased to 3.12%.
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What you should know
With inflation failing to slow down in February 2024 after the MPC’s meeting, it remains to be seen if the MPC will hold rates or there will be further hikes.
However, based on personal statements from the last MPC meeting, there was a consensus by members of the committee to hike rates.
According to the personal statements by some of the committee members, excess liquidity (money supply) was driving inflationary pressures in the country.
- One of the committee members, Aku Pauline noted, “In my view, the growth in M1 could further worsen inflationary 3 pressures in the economy, as it signals rising transactionary motive or excess liquidity in the system.”
- Another member, Bamidele Amoo noted, “When the growth in money supply is decomposed, data showed that 3.68% growth in M1 indicate rising transactionary motive by consumers, which could further worsen inflationary pressures in the economy.”
With money supply data for February 2024 yet to be released, it remains to be seen if the MPC decisions taken last month have had any effect.
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However, there is a possibility that the huge yield rates offered in treasury bills, FGN bonds, and OMO bills over the past one month could have an effect in driving down money supply.