Nigeria’s central bank on Tuesday raised its key interest rate for the sixth time this year, citing renewed inflationary and exchange rate pressures.
The decision to raise the Monetary Policy Rate by 25 basis points to 27.50% (NGCBIR=ECI), takes this year’s hikes to a cumulative 875 basis points.
Inflation rose for the second straight month to 33.88% in annual terms in October (NGCPIY=ECI), in what has been the country’s worst cost-of-living crisis in decades.
CBN Governor Olayemi Cardoso said food and energy prices were key contributors to the uptick in inflation, and that persistent pressure on the country’s naira currency was a concern.
“Members, therefore, agreed unanimously to remain focused in addressing price developments,” he told a news conference in Abuja.
Cardoso said the central bank was committed to the “war against inflation” and expected the results of its tightening steps would be more visible in the first quarter of 2025.
“It’s also important for people to understand that there’s a time lag between when you implement policies and when they have an impact,” he said.
Price pressures have been spurred by President Bola Tinubu’s moves to slash petrol and electricity subsidies and devalue the naira.
Those steps are aimed at lifting economic growth and shoring up public finances in Africa’s top oil producer, though the growth rate remains well below a 6% target set by Tinubu.
