CBN raises rate for third straight time to 26.25% in defence of naira

In a persistent war against rising inflation, the Central Bank of Nigeria (CBN) on Tuesday raised its benchmark interest rate by 150 basis points to 26.25 percent, the third straight hike this year, to control the rising prices of goods and services and to ensure stability of the naira.

After the two-day Monetary Policy Committee (MPC) meeting in Abuja, the members agreed to hold other parameters unchanged. Consequently, the CBN retained the asymmetric corridor around the MPR at +100/-300 basis points, cash reserve ratio (CRR) at 45 percent, and retained the liquidity ratio (LR) at 30 percent.

Olayemi Cardoso, governor of the CBN, announced this in Abuja after the meeting. Most analysts have anticipated a 100 basis point increase in the Monetary Policy Rate (MPR) to rein in inflationary pressure.

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The CBN’s move has satisfied the taste of investors for attractive yield but put borrowing costs high for the real sector and the small and medium enterprises (SMEs).

“We now expect the Central Bank of Nigeria to raise its policy rate by 100bps to 25.75 percent at its May MPC meeting (previously, on hold),” said Razia Khan, managing director, Chief Economist, Africa and Middle East Global Research, Standard Chartered Bank.

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Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.