CBN hikes interest rate to 27.50% amidst rising inflation
Story by Victor Itodo ABUH
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has increased the benchmark interest rate by 25 basis points, moving it from 27.25% to 27.50%.
All 12 members of the committee were present and voted unanimously for the hike.
The committee also decided to retain the asymmetric corridor around the Monetary Policy Rate (MPR) at +500 and –100 basis points.
Addressing the press, CBN Governor Olayemi Cardoso highlighted that the decision was influenced by renewed inflationary pressures, as headline, food, and core inflation rates rose year-on-year in October 2024.
“The committee was particularly concerned that all three measures also inched up on a month-on-month basis, suggesting the persistence of price pressures with attendant adverse impact on income and welfare of citizens,” said Cardoso.
Food prices remain a significant contributor to inflation, but the committee lauded the federal government’s improved security efforts in the Northeast, which could enhance food production.
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Cardoso also noted that rising energy costs and the recent hike in Premium Motor Spirit (PMS) prices have further impacted production and distribution costs.
Despite these challenges, the committee expressed optimism that the full deregulation of the downstream petroleum sector would stabilize prices in the medium term.
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