CBN May Hike Interest Rate Again Soon

Financial analysts have alerted Nigerians that there may be an increase in interest rates in the coming months.

The observation was raised after the Central Bank of Nigeria (CBN) announced the schedule of its 287th meeting of the Monetary Policy.

The event according to the memo would hold on Monday (today) and Tuesday in Abuja.

With respect to this, some analysts at Cordos noted that the apex bank’s Monetary Policy Committee (MPC) may in the coming months hike interest.

The development according to them may be taken at the MPC’s next meeting.

“Given the tight labour market conditions and higher inflationary pressures, we expect the committee to hike rates further in the coming months. However, we think a continuous moderation in inflation data could prompt the committee to be less hawkish at its next meeting,” the analysts noted.

They added, “In the same vein, the MPC of the Bank of England increased the key policy rate for the seventh consecutive time by 50bps to 2.25 per cent, the highest rate since November 2008 (3.0 per cent).

“The voting pattern was mixed, with three members wanting a more aggressive 75bps increase, five voting for a 50bps hike, and one member preferring a 25bps rate hike. The Committee highlighted that an increase was warranted given the (1) tight labour market conditions amid wage increases and (2) domestic inflationary pressures. That said, the Committee also voted to reduce the BOE’s GBP838.00bn government bond holdings by GBP80.00bn over the next 12 months.”

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