Nigeria’s Central Bank Surprises Markets with Fifth Rate Hike to Tackle Inflation

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Nigeria’s Central Bank Surprises Markets with Fifth Rate Hike to Tackle Inflation

Loveworld / 2 hours

September 25, 2024

1 min read

Nigeria’s central bank unexpectedly raised its benchmark lending rate by 50 basis points to 27.25% to combat persistent inflation, marking the fifth hike this year. Central Bank Governor Olayemi Cardoso announced the decision, which aims to address ongoing inflationary pressures amid the worst cost-of-living crisis in a generation.
This latest increase follows rate hikes in July, May, March, and February, with the latter being the most significant adjustment in 17 years. Despite a recent dip in inflation and stability in the naira, the central bank opted for tightening measures over economic growth concerns.
Governor Cardoso noted that previous rate hikes had helped moderate inflation, but rising energy prices continue to pose risks. He expressed worries that recent increases in petrol prices could negate the progress made in reducing headline inflation observed last month.