Nigeria's Central Bank Surprises Market with Fifth Consecutive Rate Hike

Nigeria's central bank raised its benchmark lending rate to 27.25%, surprising markets. Governor Olayemi Cardoso confirmed the decision was unanimous. This is the fifth consecutive rate hike this year, going against analysts' expectations as inflation had fallen for two months and the naira currency remained stable.

Nigeria's central bank has taken the market by surprise by hiking its benchmark lending rate to 27.25% from 26.75%. Governor Olayemi Cardoso stated that the monetary policy committee's (MPC) decision was unanimous.

This marks the fifth straight rate hike this year, with previous increases of 50 basis points (bps) in July, 150 bps in May, 200 bps in March, and 400 bps in February, the largest in 17 years. Analysts had largely predicted that the central bank would keep rates steady as inflation had decreased for the second month in August and the naira currency held firm, converging on official and parallel markets after the bank resumed regular dollar sales to help stabilize the currency.