Breaking: CBN Raises Interest Rates In Face Of High Inflation

Breaking: CBN Raises Interest Rates In Face Of High Inflation

The Central Bank of Nigeria (CBN) announced on Tuesday an increase in the Monetary Policy Rate (MPR) by 50 basis points, raising it from 26.25% to 26.75%. This decision comes amidst significant inflationary pressures and a sharp rise in food prices. The announcement was made by CBN Governor Olayemi Cardoso following the conclusion of the apex bank’s 296th Monetary Policy Committee (MPC) meeting held in Abuja……. CONTINUE READING 

The MPC has maintained a firm stance aimed at curbing inflation since its resumption earlier this year, resulting in a cumulative hike of more than 500 basis points. In May, the rate had been raised to 26.25%.

Inflation accelerated to 34.19% in June, as reported by the National Bureau of Statistics, marking a 0.24% increase compared to May 2024, when headline inflation stood at 33.95%. Year-on-year, June 2024 saw an 11.40% increase over June 2023’s inflation rate of 22.79%. Month-on-month, inflation rose by 2.31% in June 2024, up from 2.14% in May 2024, indicating a higher rate of price increase between the two months.

Governor Cardoso reiterated the MPC’s commitment to maintaining price stability and expressed readiness to continue tightening measures until inflation is brought under control.

Various reports from investment firms had anticipated the MPR hike. Cowry Asset Management projected a 25 to 50 basis points increase in interest rates, while the Meristem report foresaw a 100 basis point rise in the MPR to 27.25%, while keeping other policy parameters unchanged. These projections underscored the MPC’s focus on inflation management and sustaining capital inflows crucial for exchange rate stability.