‘Aggressive’ inflation spurs Nigeria to hike rate to 3-year high

The monetary policy committee voted to hike the rate by 100 basis points to 14%, Governor Godwin Emefiele said in a televised briefing in the capital, Abuja, on Tuesday.
Image: Bloomberg

Nigeria’s central bank increased its key interest rate for a second successive meeting for the first time in more than a decade to curb accelerating inflation.

The monetary policy committee voted to hike the rate by 100 basis points to 14%, Governor Godwin Emefiele said in a televised briefing in the capital, Abuja, on Tuesday. Four of eight economists in a Bloomberg survey forecast an increase — with only two predicting that margin. The last time the MPC hiked at two consecutive meetings was in 2011.

The MPC “expressed concern about the continued aggressive movement in inflation,” even after it hiked rates by 150 basis points at the previous meeting, Emefiele said. The committee expressed its resolve to “restore price stability, while providing the necessary support to strengthen our fragile economy,” he said.

Inflation quickened to a five-and-a-half-year high of 18.6% in June and has exceeded the 9% ceiling of the central bank’s target band for seven years.

The MPC’s decision to hike was unanimous, with six members voting to raise by 100 basis points, three by 50 basis points and one each calling for increases of 75 and 150 basis points.

© 2022 Bloomberg

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