The Central Bank of Nigeria convened a monetary policy meeting, resulting in a decision to raise interest rates by 0.50% to 18.50% as part of an effort to combat the prevailing issue of high inflation in the country.
Nigeria, the largest nation in Africa, has been grappling with the persistent challenge of soaring inflation. In April, the Consumer Price Index (CPI) surged to over 22%, reaching its highest level in over 17 years, exacerbating concerns about the country’s economic stability.
The monetary policy meeting held by the Central Bank of Nigeria addressed this pressing issue by implementing a measured interest rate increase. The decision to raise rates by 0.50% to 18.50% reflects the bank’s commitment to curbing inflationary pressures and stabilizing the economy.
The move to raise interest rates underscores the Central Bank’s determination to rein in rising prices and restore economic equilibrium. By making borrowing costs higher, the bank aims to reduce aggregate demand, which can help alleviate inflationary pressures by slowing down spending and consumption.
The decision comes as Nigeria faces mounting challenges in maintaining price stability and preserving the purchasing power of its citizens. High inflation erodes the value of the local currency and poses significant risks to the overall economic health of the nation.