The Central Bank of Nigeria (CBN) has increased the benchmark lending rate to 26.75%, according to CBN Governor Olayemi Cardoso. The announcement came at the conclusion of the 296th meeting of the Monetary Policy Committee (MPC) in Abuja on Tuesday.

This decision continues the MPC’s hawkish stance aimed at curbing inflation, marking a significant increase of over 500 basis points since the beginning of the year. The previous rate, set in May, was 26.25%.

The latest inflation figures from the National Bureau of Statistics show a rise to 34.19% in June, up from 33.95% in May. This marks a 0.24 percentage point increase from the previous month and an 11.40 percentage point increase year-on-year from June 2023, which stood at 22.79%. On a month-on-month basis, the headline inflation rate in June 2024 was 2.31%, compared to 2.14% in May, indicating a higher rate of increase in average price levels.

Governor Cardoso reiterated the MPC’s commitment to achieving price stability, stating that the committee remains determined to continue tightening monetary policy until inflation is brought under control.

Investment houses had anticipated this hike. Cowry Asset Management projected a 25 to 50 basis points increase, while Meristem forecasted a 100 basis points hike, expecting the rate to reach 27.25%. Both reports emphasized the importance of inflation control and capital inflow sustainability for maintaining a stable exchange rate system.