The Central Bank of Nigeria (CBN) has raised the monetary policy rate by an additional 25 basis points to 27.50 percent to further tackle inflation, which is at a 28-year high in the country.
The decision was disclosed by the Governor of the apex bank, Olayemi Cardoso, at the end of the 298th Monetary Policy Committee (MPC) meeting in Abuja on Tuesday afternoon, monitored by Investors King.
In the sixth and final meeting for the year, the CBN opted for a 25 basis points addition, after it announced a 50 basis-point rise that brought the previous rate to 27.25 percent in September 2024.
The CBN Governor announced that the next meeting will be held in January 2025, and hopes that there will be considerable progress as seen in GDP figures.
The country’s economy had risen by 3.46 percent in the second quarter of the year supported by the oil and services sectors.
Analysts noted that increasing interest rates helps to increase the cost of borrowing for individuals and businesses.
Low interest rates can lead to excessive borrowing and investments in assets that will then inflate their prices.
However, many businesses have called for a pause to the hikes as it has only worsened the business environment.
Mr. Cardoso also used the opportunity to reiterate that the CBN will continue to employ necessary means to bring down inflation.
He projected that Nigeria’s high inflation should moderate by the end of the first quarter of 2025.
The inflation rate continued its upward trend in October 2024, impacted by rises in the price of food, electricity, and fuels, as it came in at 33.88 percent, relative to the September 2024 headline inflation rate of 32.70 percent.
