HomeFinance NewsFinanceNigeria's Money Shock: Interest Rates Soar to Record-Breaking Highs

Nigeria’s Money Shock: Interest Rates Soar to Record-Breaking Highs


Nigeria’s central bank hikes interest rate to 24.75% as it battles sky-high inflation, currency crisis


Nigeria’s central bank has taken aggressive steps to combat rampant inflation and a plummeting currency.

Minutes from previous meetings show policymakers strongly advocating for aggressive interest rate hikes to tame inflation, which has reached an annual rate of 31.7%.

The naira, Nigeria’s currency, has dropped by 70% against the U.S. dollar over the past year.

To address this crisis, the central bank has implemented consecutive interest rate hikes.

In Tuesday’s meeting, the key interest rate was raised by 200 basis points to 24.75%, signaling officials’ commitment to fighting inflation.

Despite being smaller than the previous 400 basis point hike, the latest increase indicates that the battle against inflation remains a priority.

Experts believe that further tightening is likely as Governor Cardoso faces the daunting task of ending Nigeria’s currency and inflation woes.

The central bank’s February minutes revealed differing views among policymakers about the causes of inflation and currency weakness.

Some emphasized the need for aggressive hikes to boost the naira’s appeal to foreign investors, while others cautioned against raising rates too quickly due to concerns about economic growth.

Despite these varying opinions, the decision to hike rates by 400 basis points in February demonstrated the central bank’s determination to address the challenges facing the Nigerian economy.

The recent 200 basis point hike reinforces this commitment, signaling that the fight against inflation will continue to dominate policy decisions in the coming months.

  • Overall sentiment: negative
  • Positive

    “The CBN announced that its main monetary policy rate would rise to 24.75% from 22.75%…”

    “However, it has since recovered some ground, trading around 1,400 naira as of Tuesday morning after the CBN announced that a $7 billion backlog of imports had finally been cleared.”


    “Nigeria’s naira currency plunged by around 70% against the U.S. dollar over the course of a year, hitting an all-time low of around 1,600 to the dollar in late February.”

    “Governor Olayemi Cardoso told a press conference that policymakers believed they need to continue tightening in order to tame runaway inflation, according to Reuters.”

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