New Telegraph

Report: CBN among banks likely to tighten monetary policy

The central banks of Nigeria, South Africa and Egypt are among six likely to tighten monetary policy in the days ahead, Bloomberg said in a report yesterday, adding that another six countries are set to pause as they assess the impact of previous hikes and relief measures to contain prices. The report said that topping the agenda will be the implications that weaker local currencies will have on the cost of imported goods, as aggressive rate hikes by the Federal Reserve and expectations of more to come boost the dollar.

The repercussions of Russia’s war in Ukraine and an anticipated downturn in Europe and China, alongside emerging price pressures from extreme weather events, are also likely to be in the spotlight. Specifically, the report said: “Nigeria’s central bank is expected to step up monetary tightening after inflation hit a fresh 17-year high in August.

It threatens to remain elevated because of floods in its food-producing regions, a surge in diesel costs and continued currency weakness. Governor Godwin Emefiele said at the July MPC meeting that policy makers will lean toward additional hikes if inflation continues to be “aggressive.” An increase in the benchmark would take it over 14 per cent for the first time since the rate was adopted in 2006. The central bank “may feel there is still some scope to raise rates in order to attract foreign exchange inflows,” said Joachim MacEbong, lead analyst at Lagos-based Acorn and Sage Consulting. “Inflation remains a serious concern.”

Read Previous

NGX All-Share Index closes weak, down 5bps

Read Next

Free abortion course fills gap in health workers’ education – IPPF

Leave a Reply

Your email address will not be published. Required fields are marked *