By John Ikani
Nigeria’s Central Bank (CBN) raised its benchmark interest rate, known as the Monetary Policy Rate (MPR), in a bid to curb soaring inflation. The new rate, set at 26.75%, marks a 50 basis point increase from the previous 26.25%.
CBN Governor Olayemi Cardoso announced the decision on Tuesday after the bank’s Monetary Policy Committee (MPC) meeting in Abuja. This move comes on the heels of Nigeria’s inflation rate reaching a staggering 34.19% last week, fueled in part by a continuous rise in food prices.
Governor Cardoso, during a press briefing, explained that the MPC members unanimously voted to raise the rate and adjust the surrounding corridor.
He emphasized the committee’s awareness of the strain inflation places on households and businesses and their unwavering commitment to tackling the issue.
“The committee prioritizes price stability and remains confident that inflationary pressures will ease in the near future, despite the June 2024 inflation surge,” Cardoso stated. “This optimism is anchored on the combined effect of tighter monetary policy and recent government measures aimed at curbing food inflation.”
The committee specifically highlighted the persistent problem of food inflation, which continues to disrupt price stability. While monetary policy has aimed to control overall demand, rising food and energy costs persist in pushing prices upwards. Insecurity in food-producing regions and high transportation costs for agricultural products further exacerbate the issue.
“The committee recognizes the critical importance of addressing these challenges to achieve a lasting solution to the persistent pressure on food prices,” Cardoso concluded.
