Apex bank of Nigeria, the Central Bank of Nigeria (CBN) has raised its benchmark interest rate by 150 basis points (bps) to 26.25%, the highest level since at least 2007, in response to a continued rise in inflation.
This was decided during the latest Monetary Policy Committee (MPC) meeting.
CBN Governor, Olayemi Cardoso stated that the MPC opted for the increase to ensure price stability, despite the choice between hiking or holding rates to assess the impact of previous hikes.
This records as the third rate increase this year, following hikes of 200 bps in March and 400 bps in February.
In Nigeria, inflation has skyrocketed to a 28-year high of 33.69% year-on-year in April, as a result of the government’s cuts to petrol and electricity subsidies, including the devaluation of the naira.
The MPC’s next rate-setting meeting is scheduled for July 2024.
The Monetary Policy Committee is the highest policy making committee of the Bank mandated to review economic and financial conditions in the economy, alongside determining appropriate policies in the short to medium term.
saharandaily