Nigeria’s central bank has raised its benchmark interest rate by 150 basis points (bps) to 26.25%, the highest level since at least 2007, in response to a continued rise in inflation.
The decision was made during the latest Monetary Policy Committee (MPC) meeting.
Governor Olayemi Cardoso stated that the MPC opted for the increase to ensure price stability, despite the choice between hiking or holding rates to assess the impact of previous hikes.
This marks the third rate increase this year, following hikes of 200 bps in March and 400 bps in February.
Inflation in Nigeria has surged to a 28-year high of 33.69% year-on-year in April, driven by the government’s cuts to petrol and electricity subsidies and the devaluation of the naira.
Analysts had widely anticipated the hike, given the ongoing inflation and naira volatility.
The MPC’s next rate-setting meeting is scheduled for July.