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The Central Bank of Nigeria (CBN) has held its monetary policy rate steady at 27.50% for the third time this year, reaffirming its commitment to a tight policy stance until inflationary pressures ease.
Consumer inflation in the country declined for the third consecutive month in June, falling to 22.22% year-on-year from 22.97% in May.
Central Bank Governor Olayemi Cardoso noted the downward trend in inflation and stated that the Monetary Policy Committee’s decision was driven by the need to sustain disinflation.
“Maintaining the current monetary stance will continue to address the existing and emerging inflationary pressure,” Cardoso said, adding the goal was to get inflation to single digits.
Most economists surveyed by Reuters had anticipated that the central bank would keep the rate steady, following six hikes earlier in 2024 aimed at curbing inflation, which had reached 28-year highs multiple times last year.
Price pressures have been driven by President Bola Tinubu’s economic reforms since taking office in 2023, including the removal of fuel subsidies and the devaluation of the naira.
Inflation saw a sharp drop in January after the statistics agency revised its base year and adjusted the inflation basket. The rate fell to 24.48% annually from 34.80% in December.
Since then, the pace of decline has slowed. Cardoso attributed the June decrease in inflation mainly to easing energy prices and improved stability in the foreign exchange market.
“Despite these positive developments, members (of the MPC) observed the uptick in month-on-month headline inflation, suggesting the persistence of underlying price pressures, the continued global uncertainties,” he said. He added that tariff wars and geopolitical tensions could further sustain these price pressures.
The World Bank has warned that persistently high inflation remains a challenge for Nigeria, urging the country to maintain tight monetary and disciplined fiscal policies.
