As inflationary trends in Nigeria is driven by global movement of oil prices which is steadily looking up now, the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) has hinted that cutting interest rates in the first half of the year will be determined by easing of inflation.
CBN Governor, Godwin Emefiele, said “Once inflation gets to low double digits and high single digit happens, then it should be easy for the MPC to begin to look at easing”.
According to him, “I want to think that between the end of the first and second quarter, we should begin to see easing”.
It would be recalled that the first MPC meeting for the year scheduled for Monday and Tuesday this week failed to hold due to inability of the Committee to form quorum caused by Senate’s step down of confirmation of new seven nominees to replace those whose stay had expired.
Analysts say while inflation slowed to a 20-month low of 15.4 per cent in December, it’s still above the CBN’s six per cent to nine per cent target band.
Though Emefiele noted that inflation is “treading downwards, but a little bit sticky downwards,” his “believe that the rate of moderation will improve in the coming months,” may be further hampered by the inflationary trend that may be triggered by observed surge in oil prices after all.
