CBN raises benchmark interest rate to 24.75% amid inflation woes

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The Central Bank of Nigeria (CBN) raised its monetary policy rate by 200 basis points to 24.75% from 22.75%, its governor Olayemi Cardoso said on Tuesday.

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The decision by the bank’s Monetary Policy Committee was just the second since Cardoso took office last September, as it did not hold a meeting under him until February.

At that meeting, the Central Bank of Nigeria delivered its largest rate hike in around 17 years to try to get price pressures under control, raising it by 4 percentage points.

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Inflation is above 30% in annual terms, its highest in almost three decades, leaving millions of people in Africa’s biggest economy and most populous nation struggling to meet their basic needs.

Cardoso told a press conference that the members of the MPC were convinced they needed to continue with the tightening cycle to tame inflation.

Price pressures have been spurred by reforms implemented by President Bola Tinubu in his first year in charge, chiefly ending a costly fuel subsidy and devaluing the country’s naira currency twice.

Tinubu has defended those reforms as necessary to lift economic growth and attract investment, but they have prompted public anger and, in some cases, desperation.

 

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