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Citing Inflationary Concerns, Nigeria Raises Interest Rate

Nigeria's central bank unexpectedly raised its benchmark interest rate to curb accelerating inflation and boost portfolio inflows. The monetary policy committee voted to hike the rate by 150 basis points to 13% - for the first time in two and a half years. 

Speaking on the decision, the Central Bank's governor Godwin Emefiele said that global supply disruptions caused by Russia's invasion of Ukraine and the resurgence of the Covid-19 pandemic in China - the hub of global manufacturing - caused an unprecedented food and energy price surge. These events triggered high levels of inflation globally, and in Nigeria. Emefiele said that the central bank was faced with the dilemma of bringing down the inflation rate and at the same time implementing policies that would push economic growth. Emefiele said that the central bank will keep the new rate until it is able to moderate inflation.

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