Nigeria postpones rate decision again despite soaring inflation
The critical meeting to determine interest rates in Nigeria, which was originally scheduled for Monday and Tuesday, has been delayed by the Central Bank. This postponement follows a worsening of headline inflation in October, reaching an 18-year high of 27%, according to data from the country's Bureau of Statistics.
The unexpected delay has surprised many analysts, especially since the rates meeting in September was also postponed without explanation. At that time, the Central Bank of Nigeria (CBN) had assured that new dates would be communicated "in due time."
The current meeting, initially expected to be the first rates meeting under the new CBN governor, Olayemi Cardoso, who was approved by the Senate in September, has now been rescheduled to an unspecified date. While the acting CBN governor, Folashodun Shonubi, had raised interest rates twice, it appears that Olayemi Cardoso is opting to defer such decisions.
The bank's choice to unexpectedly postpone today's meeting without providing explanations or indicating a rescheduled date underscores a significant communication lapse. This has proven to be a challenge to the country's endeavors to attract foreign investors. In what promises to be an extended period of interest-rate decisions across Africa, Bloomberg's forecast indicates that the continent's largest economies are likely to maintain higher interest rates for an extended duration. This is particularly true for nations facing pronounced currency depreciation and robust inflation, such as Nigeria and Angola, where rate hikes are anticipated. Egypt may also join this trend, either in its upcoming meeting or early next year. This stands in stark contrast to major advanced economies, where market participants believe the most aggressive tightening cycle in a generation has concluded. Meanwhile, other countries, including South Africa, Morocco, Kenya, and Ghana, are expected to keep rates unchanged to carefully evaluate inflation-related risks.