As the Central Bank of Nigeria (CBN) holds its Monetary Policy Committee (MPC) announces its policy decisions today, some stakeholders project a hike in policy rates.
This is against the backdrop of global monetary policy trend, which has seen the American Central Bank (The Fed), and the Bank of England increasing Monetary Policy Rates (MPR).
The MPR is the benchmark interest rate that guides all other rates in the financial market.
The MPC had raised the MPR by 100 basis points from 13 per cent to 14 per cent in its last meeting in July.
The July increase represented the second consecutive hike in the MPR within two months.
The committee had in May, and for the first time since September 2020, increased MPR by 150 b
subsisting rates as past rates increase had not tamed inflation.
“Though I expect that they may further raise rates, my advice to the MPC will be that they hold rates.
“We have raised rates by 250 basis points in the last two meetings but inflation has surged further.
“This means that our own inflation is not tightly linked with interest rates and may recede in its own time.
“Ours is a bit of a carryover from the COVID-19 era of production shut down and imported inflation because our economy is dependent on foreign ones battling inflation presently,” he said.