Cardoso’s CBN Jerks Up Interest Rate

The central bank of Nigeria under the watch of its Governor, Yemi Cardoso has raised its key benchmark interest rate by 400bps to 22.75%.

The increase announced on February 27th 2024 which marginally surpassed expert predictions pegging interest rate at 21% represents a new record high since 2007.

From all indications, It is the first monetary policy meeting to be held since July last year and the first to be presided over by Governor Cardoso since he took office in September.

According to Cardoso, the central bank is determined to tighten rates and money supply.

The idea, he said, is to rein in inflation and ensure liquidity in the forex market.

Statistics show that annual inflation rate in Nigeria steadily rose to 29.9% in January 2024.

Incidentally, this also represents a 28-year high in the level of inflation,  explaining why most Nigerians, including the labour movement, are seriously raising their voices at this time.

Food inflation accounts for the bulk of the inflation basket. It has hit 35.4%.

The naira has plunged almost 70% against the dollar so far in 2024.

In response, the central bank has embarked on a number of measures to support the nation’s currency.

These include steps taken to relax the foreign exchange regime and boost local dollar liquidity.