Nigeria Pauses Interest Rate Hikes as Inflation Slows and Naira Stabilizes

Nigeria’s central bank has opted to hold its benchmark interest rate at 27.5% for the second time this year, signaling a cautious approach as inflation shows signs of easing. The decision, made unanimously by the Central Bank of Nigeria’s Monetary Policy Committee, comes amid narrowing exchange rate gaps, lower fuel prices, and early relief from food inflation. The bank’s governor, Olayemi Cardoso, cited improving macroeconomic indicators for the decision. These include a positive balance of payments and lower fuel prices, which helped lower headline inflation to 23.71% in April. The country’s decision to rebase its Consumer Price Index (for the first time since 2009) also contributed to the drop in inflation. While analysts say the pause reflects a focus on stability, economist Abdullahi Usman warns that true recovery hinges on deeper fiscal reforms.

Forbes Africa