•Liquidity Ratio stays at 30%, CRR at 45%.
••Move aimed at mopping up excess cash and attracting foreign capital.
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has opted for a strategic pause in its aggressive rate-hiking cycle, retaining the benchmark interest rate (MPR) at 26.5 per cent.
The decision, announced on Wednesday after the MPC meeting in Abuja, underscores the apex bank’s commitment to a restrictive monetary stance aimed at taming persistent inflationary pressures and stabilizing the Naira.
In a unanimous move to maintain current liquidity levels, the Committee also voted to keep all other policy parameters constant. The Cash Reserve Ratio (CRR) for Deposit Money Banks was retained at 45 per cent, while the Liquidity Ratio was held at 30 per cent. Furthermore, the asymmetric corridor around the MPR was maintained at +50/-450 basis points.
The MPC also kept the CRR on Non-Treasury Single Account (Non-TSA) public sector deposits at 75 per cent, a move seen by analysts as a continued effort to mop up excess liquidity that often fuels currency volatility.
Central Bank Governor, Olayemi Cardoso, indicated that the hold is necessary to allow previous policy interventions to fully permeate the economy. By maintaining the status quo, the CBN is balancing the urgent need to lower inflation with the necessity of supporting financial system stability and capital inflows.
Financial experts believe this “wait-and-see” approach signals that while the peak of the hiking cycle may be near, the era of “cheap money” remains firmly in the past as the CBN prioritizes price stability as the bedrock for long-term economic growth.
