Key questions:
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Nigeria’s monetary policy committee voted to raise its key benchmark rate by 25bps to 18.75% to tame inflation and stimulate investments. How did the market react?
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Given the outlook for higher inflation, what can we expect from the MPC going forward?
At Nigeria’s fourth monetary policy committee (MPC) meeting of 2023, and the first under President Tinubu, the MPC voted to hike rates (albeit moderately) by 25 basis points (bps) to 18.75%.
In line with our expectations for a moderate hike at the end of the two-day meeting on Tuesday, 25th July, the MPC also narrowed the asymmetric corridor to +100/-300 (versus +100/-700) basis points around the MPR. Other monetary parameters were left unchanged.
In his first stint as the chair of the MPC, Folashodun Shonubi, the acting Central Bank Governor, reinforced the committee’s pledge to rein in escalating inflation and close the negative real interest rate gap,
