By Milcah Tanimu
The Central Bank of Nigeria (CBN) has raised its Monetary Policy Rate (MPR) by 50 basis points to 27.25%, defying global trends where central banks cut interest rates. This decision contrasts with recent cuts by the US Federal Reserve and the South African Reserve Bank.
Analysts expected the CBN to lower its rate due to easing inflation. However, CBN Governor Olayemi Cardoso emphasized the need to maintain price stability and curb inflation.
Globally, several central banks have recently reduced their rates. The Swiss National Bank led the way, cutting its benchmark rate to 1.0% as inflation remains subdued at 1.1%.
In the US, the Federal Reserve cut its rate for the first time in four years, bringing it to between 4.75% and 5%. Chair Jerome Powell highlighted the need to prevent high borrowing costs from negatively impacting the economy.
Meanwhile, South Africa’s Reserve Bank reduced its main lending rate to 8%, citing declining inflation below their target.
The European Central Bank also cut rates to 3.5%, while Mexico’s central bank lowered its benchmark rate to 10.50% as inflation pressures eased.
As the CBN stands firm on its rate hike, it aims to stabilize the naira and combat inflation, positioning Nigeria differently amid a wave of global rate cuts.
