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HomeTop NewsNigeria's central bank hikes interest rate by 150bsp to tame inflation

Nigeria’s central bank hikes interest rate by 150bsp to tame inflation

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By Oludare Mayowa

In a bid to curb Nigeria’s persistently high inflation, the Central Bank of Nigeria (CBN) raised its Monetary Policy Rate (MPR) by 150 basis points to 26.25%, marking the third consecutive increase this year.

The decision comes after a two-day meeting of the CBN’s Monetary Policy Committee (MPC), chaired by Governor Yemi Cardoso. Soaring inflation, currently at 33.69% (April 2024), remains a major concern.

“The key focus of the MPC meeting was to achieve price stability by using tools available to rein in inflation,” Cardoso explained.

He identified food inflation as a key driver, attributing it to rising transportation costs, infrastructure challenges, insecurity, and exchange rate issues.

This announcement coincides with ongoing public struggles due to high commodity prices and a rising cost of living.

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The removal of fuel subsidies last year and the floating of the naira have had a significant impact. Nigerians are facing historic high inflation, sparking protests and pressure from labour unions.

President Bola Tinubu has urged patience, expressing confidence that ongoing government reforms will eventually ease the burden.

While the CBN has taken steps to address the falling value of the naira, including targeting cryptocurrency exchange Binance, recent gains appear to be short-lived.

The aggressive interest rate hike signifies the CBN’s determination to combat inflation. However, its effectiveness remains to be seen.

Nigerians await further developments as they grapple with the current economic realities.

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