Breaking news: The Central Bank of Nigeria hikes interest rate to 24.75% amidst Nigeria’s inflation surge to 31.7%.
The Central Bank of Nigeria has raised its monetary policy rate to 24.75% from 22.75% in response to soaring inflation, which reached 31.70% in February. CBN Governor Olayemi Cardoso announced the decision at the 294th Meeting of the Monetary Policy Committee press briefing. This marks the second rate hike by the current committee. The Cash Reserve Ratio (CRR) has also been increased to 45%.
Despite the tough decision, there was a consensus among the committee members to tighten monetary policy.
Cardoso attributed the inflation rise mainly to food prices driven by supply shortages and high logistics costs. He emphasized the importance of addressing food insecurity to curb inflation. Despite the tough decision, there was a consensus among the committee members to tighten monetary policy.
The inflation drivers include exchange rate pass-through, transportation costs, energy expenses, insecurity, and infrastructure deficits. President Bola Tinubu’s reforms have bolstered the currency and attracted increased foreign investment, with inflows reaching $2.3 billion in February, surpassing the 2023 total. Foreign investor portfolio trades on the Nigerian bourse also rose by 18% in February 2024.
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