Central Bank Hikes Interest Rate to 14% on Inflation Surge
By Bashir Olanrewaju
The Central Bank of Nigeria’s Monetary Policy Committee pushed up the benchmark interest rate for the second consecutive month to settle at 14 percent at the end of its meeting on Tuesday.
The increase was also by 100 basis points for the second straight month as committee members voted unanimously for aggressive measures to be taken to arrest soaring inflation, which touched 18.60 percent in June.
Central bank Governor Godwin Emefiele signaled higher borrowing costs are still likely if inflation fails to retreat. “If inflation continues at this particularly aggressive rate, we will continue to tighten,” he said.
Nigeria’s economy, like that of many countries, has felt the impact of the war in Ukraine in higher prices for fuel and food. While fuel costs have jumped due to higher crude oil prices, food costs have risen due to disruptions in the shipment of grains such as wheat, of which both Ukraine and Russia are major producers.