• Tuesday, February 27, 2024
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Markets expect interest rates to increase to 20.75 percent

Naira on path to fair value but tough days ahead, says Rewane

Bismarck Rewane, economist and CEO of Financial Derivatives Company, has said that the market expectation of the Monetary Policy Committee (MPC) is to increase interest rates to 20.75 per cent.

“Market Expectation Should Be A 200 Basis Points Increase In Interest Rate From 18.75 percent To 20.75 percent ”, he said on Arise TV Businessweek, talking about the global and Nigeria monetary policy outlook.

The Central Bank of Nigeria will hold its Monetary Policy Meeting in 2024 on Monday and Tuesday , February 26 and 27, according to a confidential one-page document seen by BusinessDay.

It will be the first under Yemi Cardoso, the CBN governor succeeding embattled Godwin Emefiele.

Nigeria’s headline inflation defied the global cooling trend, rising for 12 consecutive months last year to 28.20 per cent in December 2023.

Interest rates were last hiked in July 2023 to 18.75 per cent from 18.50 per cent.

Cardoso said that inflationary pressures are expected to decline in 2024 due to the institution’s inflation-targeting policy, which aims to rein in inflation to 21.4 percent.

He said that the CBN adoption of the inflation targeting framework involves clear communication, monetary policy instruments, and collaboration with fiscal authorities to achieve price stability and posture market confidence, positively influencing consumer behaviour.

The calendar of meetings, which guides the financial landscape, has been updated to reflect the first and subsequent meeting dates.

However, the committee’s composition, which is essential for decision-making, is yet to be constituted, as stated in a BusinessDay report earlier.