Policy rate: 11.5%
Inflation rate: 18.2% (March)
Inflation target: 6% – 9%
Nigerian food costs are growing at the fastest pace in more than 15 years
Nigeria’s key interest rate is likely to remain unchanged for a fourth straight meeting as concerns about the fragility of its economic recovery outweigh concerns about inflation that is more than double the ceiling of the bank’s official target.
While the economy came out of a recession in the fourth quarter and the IMF sees it growing at 2.5% in 2021, Governor Godwin Emefiele said in March the central bank can only effectively shift to taming price growth once it’s comfortable that output has reached “cruise level.”
“If growth fundamentals and outcomes improve in the near term, the committee may tend toward tightening much later in the year,” said Omosalewa Arubayi, chief economist with Vetiva Capital Management.
“Nigeria’s current inflationary pressure is driven primarily by supply constraints, while monetary components play a secondary role.”