TUE MAY 21 2024-theGBJournal| The Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) on Tuesday raised benchmark interest rate by 150 basis point to 26.25% from 24.75%, the third rate hike this year.
All other parameters were retained as follows; the asymmetric corridor retained at +100bps/-300bps, retain CRR at 45.0% and, retain liquidity rate at 30.0%.
The decision sent the key rate interest rate well into its highest level in more than two decades as the apex bank battles to cool the economy and reign in the pressures pushing up price.
Analysts had expected a more moderate 100 basis point hike but with inflation proving more persistent than expected, the MPC faced little trouble reaching its decision.
Nigeria’s inflation rose 49 basis points to 33.69% y/y in April. That is up sharply up from the 33.20% y/y seen in March 2024.
In a press conference announcing its latest decision today, the CBN Governor Yemi Cardoso drew attention to those trends and said the MPC was faced with a decision to either hike or hold rates while the impact of previous hike is observed but opted for an increase in the interest of price stability.
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