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, Olayemi Cardoso-G8Y90lhfZD.jpeg "CBN Governor, Mr. Olayemi Cardoso")
The Central Bank of Nigeria's Monetary Policy Committee has announced an increase in the benchmark lending rate to 26.75 percent.
This decision was made public by the CBN Governor, Olayemi Cardoso, following the 296th MPC meeting in Abuja on Tuesday.
The committee has taken a hawkish stance on inflation control and has raised the rate by over 500 points since the beginning of the year, with the most recent increase to 26.25 percent in May.
However, with inflation rising to 34.19 percent in June, as reported by the National Bureau of Statistics, the headline inflation saw a 0.24 percent increase compared to May 2024, which stood at 33.95 percent. On a year-on-year basis, the headline inflation rate was 11.40 percent higher than that of June 2023 (22.79 percent).
Additionally, the month-on-month headline inflation rate in June 2024 was 2.31 percent, marking a 0.17 percent increase from May 2024 (2.14 percent).
The CBN governor has consistently emphasized the committee's dedication to maintaining price stability and its willingness to continue tightening measures until inflation is under control.
Several investment houses had predicted the MPR hike, with Cowry Asset Management projecting a 25bps to 50bps increase in interest rates and the Meristem report anticipating a 100 basis point raise in the monetary policy rate to 27.25 percent while likely keeping other parameters unchanged.
Overall, it is expected that the committee will prioritize inflation control and sustainable capital inflow to maintain a stable exchange rate system, and consequently implement a rate hike accordingly.
