Global credit ratings agency, Fitch Ratings, has projected further hike in monetary policy rates by the Central Bank of Nigeria (CBN) in the second half of the year.
This was disclosed in its recently released credit outlook for Nigeria where the country’s sovereign credit default outlook was raised from stable to positive on the back of recent reforms in the monetary policy and oil and gas sector.
According to the report, the hike in interest rates in the first quarter of the year has seen the apex bank carry out open market operations at rates closer to the MPR.
Furthermore, the agency projected inflation- the major target of the MPR hike by the CBN is expected to moderate to 26.3% later this year and 18.2% by next year.
The Central Bank of Nigeria (CBN) in its first two Monetary Policy Committee (MPC) meetings in 2024 raised MPR by record 400 and 200 basis points respectively to 24.75%. The bank noted that the aim of the hike is to tame inflation and bring stability to the volatile foreign exchange market.