Nigeria’s central bank sets rate meeting amid 27 year-high inflation
- Nigeria's Central Bank is holding its first rate meeting since July 2023 on February 26-27.
- The meetings play a crucial role in managing inflation and interest rates.
- Despite previous reluctance, the Central Bank now plans to hold six rate meetings in 2024.
Nigeria's Central Bank has yielded to pressure and is set to convene its first rate meeting on February 26-27. The Monetary Policy Committee (MPC) meetings, responsible for determining interest rates, serve as a crucial tool through which the Central Bank of Nigeria (CBN) manages inflation.
This upcoming meeting marks the first since July 2023. In December, Central Bank Governor Yemi Cardoso acknowledged that the effectiveness of rate meetings had been significantly impacted by monetary transmission mechanisms.
Despite heightened inflation levels throughout 2023, Cardoso had refrained from calling any meetings. The CBN, in its recently released calendar, now proposes six rate meetings throughout the year 2024.
Points clés à retenir
Experts commenting on inflation figures anticipate potential interest rate hikes at the upcoming meetings to curb rising inflationary pressures in the country. In December, Nigerian consumer prices experienced the fastest annual increase in almost three decades, primarily driven by the cessation of fuel subsidies, which led to higher transport costs, and a weakened naira. The inflation rate reached 28.9% compared to the same month in the previous year, slightly higher than the 28.2% recorded in November, as reported by the National Bureau of Statistics on Monday. Additionally, prices rose by 2.3% during the month. This surge in inflation highlights the challenges facing Nigeria's economy, particularly in terms of rising costs and currency depreciation.