In brief
- At its May 2023 Monetary Policy Committee (MPC) meeting, the Central Bank of Nigeria (CBN) raised the Monetary Policy Rate (MPR) by 50bps to 18.5%, representing the seventh consecutive increase since May 2022.
- The Committee, however, retained the other tools of monetary policy at their current levels with the Cash Reserve Ratio and the Liquidity Ratio maintained at 32.5% and 30.0%, respectively.
- The Committee confirmed our longstanding view that Nigeria’s inflation was largely due to non-monetary factors but opted for a moderate hike in the policy rate to symbolize its commitment to restore price stability
- We expect the Central Bank to continue on the path of monetary tightening as Nigeria’s new President, Bola Tinubu, confirmed the removal of fuel subsidy amidst a potential devaluation of the Naira.
- Within the backdrop of continued restrictive monetary policy and a broken food supply chain, we anticipate downside risk to real GDP growth in FY2023.
Downloads
Download Full Report