The monetary policy committee increased the rate to 15.5% from 14%, Governor Godwin Emefiele said Tuesday in Abuja. Most economists in a Bloomberg survey expected a smaller hike and a minority saw no change.
“As long as inflation is trending upwards, we cannot assure anybody that we will not raise rates,” he said. Africa’s largest economy was a late mover globally in increasing rates in an effort to stamp out inflation and stem capital outflows. It’s now raised borrowing costs by 400 basis points, making it one of four central banks on the continent that have hiked by 300 basis points or more this year.
Annual inflation in Africa’s most populous country, where four in 10 people live below the poverty line, rose to aA slump in the value of the currency against the dollar toon both the official and parallel market has been fanning inflation. It’s also come under pressure from higher global commodity prices due to choked supply chains caused by Russia’s war in Ukraine and security issues in the nation’s food-producing regions.