In a bid to tackle the country’s persistent inflation, the Central Bank of Nigeria (CBN) has raised the interest rate by 150 basis points to 26.25 percent.
This move was announced by the CBN Governor, Yemi Cardoso, who also chairs the Monetary Policy Committee (MPC), at the end of the 295th MPC meeting held in Abuja on Tuesday, News About Nigeria reports.
This is the second rate hike this year, following a similar increase of 200 basis points from 22.75 percent to 24.75 percent in March.
The MPC has maintained a stern stance since it resumed meetings this year, aiming to curb Nigeria’s soaring inflation rate, which had risen to 33.69 percent as of April.
The rate hike is expected to impact borrowing costs, consumption, and investment decisions as the bank strives to achieve its inflation target and promote economic growth.
Before the hike, analysts had projected a rate hike, while some suggested the bank may consider holding rates steady due to moderating month-on-month inflation growth.
Nigeria’s inflation rate has steadily increased since President Bola Tinubu removed fuel subsidies and unified the exchange rate in May 2023, causing economic hardship for many Nigerians.
However, President Tinubu has assured citizens that his administration is working to address economic challenges, including reducing inflation.
He made this promise during a Ramadan Iftar event at the State House in Abuja in April.
“Don’t worry about that. Yes, we know we have the challenge of inflation – it’s okay, we will bring it down. We are reengineering our revenue, it is getting better, and we are taking our sovereignty and respect back around the world – not that we have to go there and hire them to do the job for us, we are doing it ourselves.
“Whatever is happening to us, we have to serve it by ourselves. It is your effort, your thinking, your resourcefulness, your investment, your dedication, and hard work that can only get us there,” Tinubu said.
