Additionally, following the conclusion of its Monetary Policy Committee (MPC) meeting yesterday, the central bank has opted to maintain the Monetary Policy Rate (MPR) at 27.5%, which serves as its key interest rate.
CBN Governor Olayemi Cardoso shared this information during a press conference after the MPC meeting. He mentioned, the Committee agreed unanimously to keep all the parameters unchanged, deciding to maintain the MPR at 27.50%. They also decided to keep the asymmetric corridor around the MPR at plus 500 to minus 100 basis points. The Cash Reserve Ratio for Deposit Money Banks will stay at 50%, while merchant banks will remain at 16%, and the Liquidity Ratio will continue to be at 30%.
Cardoso remarked that CBN's recent decision to raise cash withdrawal fees to N100 for every N20,000 from ATMs of other banks is likely to motivate banks to enhance cash availability at their ATMs. This, in turn, is expected to lead to an increase in the number of ATMs, facilitating easier access to cash.
He emphasized that banks have a vested interest in ensuring that their ATMs provide consistent access, allowing customers to withdraw cash efficiently. While he acknowledged improvements in the current situation, he stressed that more needs to be done for a flawless experience. He noted that certain costs must be absorbed for future planning, and this fee adjustment is one of those necessary changes.
In his opinion, this fee increase will not deter individuals from accessing their funds easily. Instead, it should prompt banks to be more accountable, particularly regarding withdrawal fees.
Cardoso also highlighted that withdrawing cash from one's own bank remains free of charge. Customers who frequently use another bank can apply for a card there at no cost, maintaining their access to cash.
He expressed optimism that this new policy will lead to a greater number of ATMs, making cash access more convenient and discouraging those who exploit gaps in the system by charging excessive fees for cash distribution. Over time, this could effectively eliminate such practices from the market, Cardoso concluded.
Addressing the need to balance the Central Bank of Nigeria's (CBN) efforts to combat inflation with the pursuit of substantial economic growth, Cardoso emphasized that the primary goal of the central bank is to ensure stability in the foreign exchange and financial markets. This stability is essential for attracting the foreign investment necessary to foster economic development.
He remarked that confidence is gradually returning to the markets, indicating that progress is being made. "As this confidence grows, we are better positioned to start moderating interest rates, as stability is crucial; without it, investors are hesitant to enter these markets."
He reiterated that the central bank's objectives remain focused on achieving stability in both the foreign exchange and financial markets. "As we maintain this stability, we are optimistic that we will see an increase in investments, which is vital for driving the growth we need."
Additionally, he noted that the current competitiveness of the currency has sparked greater interest from international investors looking to invest in the country's future.
Cardoso discussed the Central Bank of Nigeria's (CBN) perspective on inflation, emphasizing the goal of reducing the inflation rate to single digits over the medium to long term.
He stated that the CBN will maintain the orthodox monetary policies currently in place. The results thus far have been encouraging, and the bank is committed to continuing this approach. Vigilance will be a priority, as nothing can be taken for granted. Cardoso acknowledged that inflation levels have remained excessively high for an extended period. Therefore, the primary objective is to transition from double-digit inflation to single-digit figures in the medium to long term.