November 26, 2024/United Capital Research

At the 298th Monetary Policy Meeting held on the 25th and 26th of November 2024, the Monetary Policy Committee (MPC, or the Committee) decided to raise the Monetary Policy Rate (MPR) by 25bps from 27.25% to 27.50%, a new all-time high. This decision represents the MPC’s sixth consecutive MPR increase since the beginning of the year, resulting in a total hike of 975bps (from 18.75% to 27.50%) during this cycle. Meanwhile, the policymakers maintained the Cash Reserve Ratio (CRR) at 50.00% and retained the liquidity ratio at 30.00%. Additionally, the Committee maintained the asymmetric corridor at +500/-100bps around the MPR.

During the meeting, the Committee focused on tackling the sustained rise in inflation as well as indicated interest in promoting stability in the foreign exchange market. The latest inflation report for Oct-2024 revealed that the y/y headline Consumer Price Index (CPI) stood at 33.88%, reaching a peak not observed since 1996. Food inflation remains a key contributor to the optics,
food inflation rose to 39.19% y/y suggesting the existence of price pressures. The devaluation of the Naira has also been a key factor contributing to the inflationary pressure. The Naira has continued to depreciate against major global currencies, reaching N1,675.62/USD as of November 25, 2024.

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