The Nigerian central bank has raised its policy rate once more in response to the recent increase in inflation

Nigeria has the most people in Africa. On Tuesday, the country’s central bank raised the main interest rate for the sixth time this year, citing new price and exchange rate pressures.

This year’s hikes add up to 875 basis points with the move to raise the Monetary Policy Rate by 25 basis points to 27.50% (NGCBIR=ECI), opens new tab.

Reuters polled experts and found that most of them thought policy would get tighter on Tuesday.

For the second month in a row, inflation rose to 33.88% per year in October (NGCPIY=ECI). This is part of the worst cost-of-living problem the country has seen in decades.

Governor of the Central Bank of Nigeria Olayemi Cardoso said that rising prices for food and energy were major causes of the rise in inflation. He also said that the constant pressure on the naira currency was a worry.

“Members agreed unanimously to stay focused on addressing price changes,” he said at a news conference in Abuja, the capital.

Cardoso said that the central bank was dedicated to the “war against inflation” and that it thought the “war against inflation” would show more results in the first quarter of 2025.

“It’s also important for people to understand that there’s a time lag between when you implement policies and when they have an impact,” he added.

President Bola Tinubu’s moves to cut back on subsidies for gasoline and power and weaken the naira have made prices rise. Tinubu set a goal for economic growth of 6%, but the rate of growth is still well below that. These steps are meant to boost economic growth and strengthen the country’s resources.

Capital Economics said in a research note that it thought Nigeria’s tightening cycle was over after the rate hike on Tuesday. However, it did not expect rates to go down until the second quarter of next year.

Razia Khan at Standard Chartered said that keeping the naira firm would be important for keeping inflation in check. She also said that if the central bank could do that, there might not be a need for many more rate hikes.