Rising inflation,Weak naira,further rate hike.
The Monetary Policy Committee (MPC) of Nigeria is anticipated to raise interest rates during its upcoming meeting due to concerns over the weakening naira and rising inflation. The naira’s status shifted from being the world’s top-performing currency in March to the worst in April, while inflation surged to 33.2 percent in March 2024.
Analysts predict another interest rate hike to address these economic challenges, although the Central Bank of Nigeria (CBN) may adopt a wait-and-see approach given the inflation rate’s proximity to its peak. Despite indications that inflation may be nearing its zenith, uncertainties persist in Nigeria’s economic landscape, including fuel shortages, exchange rate fluctuations, and impending financial market events. Some analysts advocate for a cautious approach by the CBN, suggesting that aggressive interest rate hikes may stifle economic output without effectively addressing inflationary pressures driven by non-monetary factors.
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