The Central Bank of Nigeria’s Monetary Policy Committee (MPC) has increased the interest rate by 50 basis points to 26.75% from 26.25% in May 2024.
CBN Governor Olayemi Cardoso explained that the decision aims to tackle rising core inflation and food inflation, which stood at 34.19% and 40.87% in June.
All other monetary parameters remain unchanged, including the Cash Reserve Ratio, Liquidity Ratio, and Asymmetric Corridor.
The interest rate hike means businesses, farmers, manufacturers, and investors will face higher loan costs from banks.
Despite the CBN’s efforts, inflation persists, leading analysts like Muda Yusuf to advocate for a pause in interest rate hikes, citing overstretched monetary instruments.
This marks the fourth interest rate increase since Cardoso’s appointment in September last year, with Nigeria’s interest rate rising from 18.75% in May 2023 to 26.75% currently.
